Market focused on Russia, Argentina, Israel; CDB sells bonds; China Merchants sets roadshow

By Christine Van Dusen

Atlanta, July 30 – China Development Bank printed notes on Wednesday as investors remained focused on Israel, Russia – and sanctions from the United States, European Union and Japan – and the fact that Argentina appears to be on the brink of default.

“The headlines were thick with news about turmoil in the banking industry, an impending default in Argentina, sanctions against Russia, an intensifying bombardment in Gaza, record low Bund yields, tightening spreads in the euro zone periphery and a flattening yield curve in the core of the Eurozone,” according to a report from Erste Group Research.

Argentinian officials were in New York to meet with bondholders who did not restructure their bonds after the country defaulted on debt in 2002 and have sued the sovereign. The meeting is being viewed as a last-ditch effort to evade a new default, and sent some bonds up as much as 3 points in trading on Wednesday, a trader said.

But in general, for emerging markets bonds, “there’s this eerie atmosphere of calm before the storm,” Erste Group said in its report.

The primary market was largely quiet, with just the new deal from China Development Bank, which priced RMB 500 million 4.35% notes due 2024 at par to yield 4.35%, a market source said.

And China Merchants Bank Co. Ltd. set a roadshow for a dollar-denominated issue of notes with ANZ, HSBC, Morgan Stanley, UBS, CMB International Capital, Credit Suisse and Wing Lung Bank.

© 2015 Prospect News.
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