Deals from Domodedovo Airport, Gospodarstwa Krajowego; oil, elections eyed; Gazprom on deck

By Christine Van Dusen

Atlanta, Nov. 3 – Russia’s Domodedovo Airport and Poland’s Bank Gospodarstwa Krajowego sold notes on Thursday that saw investors focusing on lower oil prices and the Federal Reserve’s decision to hold off on a rate hike.

“This certainly paves the way for a rate hike in the Dec. 14 meeting as Fed futures price in a near-80% probability for such a move,” a London-based analyst said. “The FOMC meeting left markets fairly unimpressed and revealed nothing unexpected as we are quickly approaching the U.S. elections.”

It is likely that volatility will persist until election day, according to a report from Schildershoven Finance BV.

“The markets will remain volatile ahead of the U.S. elections, the U.S. payrolls data publication and amid weak oil price environment,” the report said.

In trading, bonds from Turkey were mostly flat, following a report that consumer price inflation slowed in October.

“Slow open versus yesterday,” a trader said. “Cash still feels heavy, overall flat to 1 basis points tighter.”

As the morning went on and rates ticked higher, Turkish bonds continued to tighten slightly and selling paused, he said.

Bonds from South Africa continued to outperform on Thursday after charges were dropped against Finance Minister Gordhan.

“From a market perspective, this week’s events clearly support the appearance of strong institutional independence and governance,” the analyst said. “With much of the success in maintaining the investment-grade ratings dedicated to Gordhan, the dropped charges firm up our belief that Gordhan remains in a position of strength and that rationality prevails.”

Azerbaijan sees action

Meanwhile, bonds from Azerbaijan were active as oil prices hit a low, with Brent crude declining 47 cents and U.S. crude moving down 68 cents.

The State Oil Co. of the Azerbaijan Republic (Socar) was a particular underperformer, another trader said.

Domodedovo prices notes

In its new deal, Russia’s Domodedovo Airport priced $350 million notes due in 2021 at a yield of 5 7/8%, a market source said.

The notes were talked at 6 1/8%.

ING, Societe Generale and UBS were the bookrunners for the Regulation S deal.

The deal was said to have attracted more than $900 million of orders.

Other details were not immediately available on Thursday.

Polish lender sells bonds

Also on Thursday, Poland’s Bank Gospodarstwa Krajowego sold €1 billion 2% notes due Nov. 3, 2036 at 97.965, according to a company announcement.

BNP Paribas was the bookrunner for the deal.

The notes are guaranteed by the State Treasury of the Republic of Poland.

The bank is based in Warsaw.

Gazprom sets roadshow

In other news, Russia’s Gazprom OJSC will set out on Nov. 7 for a roadshow to market a euro-denominated issue of notes, a market source said.

Bank of China, Gazprombank, JPMorgan and UniCredit are the bookrunners for the Rule 144A and Regulation S deal.

Gazprom is a Moscow-based natural gas producer.

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