Russian assets shrug off new sanctions; Malaysia’s Cagamas, Viva Industrial issue notes

By Christine Van Dusen

Atlanta, Sept. 12 –Malaysia’s Cagamas Bhd. and Singapore’s Viva Industrial Trust printed notes on Friday as the European Union instituted new sanctions against Russia for its activities in Ukraine.

“After days of deliberation, the E.U. finally agreed to implement further sanctions on Russia,” a London-based analyst said. “The sanctions were largely as expected, focused on banning new debt and loans for banks, defense and energy companies.”

But Russian assets didn’t react strongly to the news, given that the European Union is expected to lift the sanctions if a ceasefire holds. Russian bank bonds were 6 basis points tighter, on average, for the week, with particularly good performance from Vnesheconombank and OAO Sberbank.

“Russian credit was fairly quick to stabilize after the announcement,” he said. “We now await the U.S. sanctions, which are largely expected to match the E.U. ones.”

Some Russian bonds did suffer a bit, though, including the perpetual notes from JSC VTB Bank. Those notes moved 17 bps wider, he said.

And Gazprombank OJSC’s 2023s were 13 bps wider, he said.

Sovereign bonds from Ukraine, meanwhile, saw support into the end of the week, said Svitlana Rusakova of Dragon Capital.

Investors focused more on the list of new issues during the week, which included notes from Hong Kong, the Emirate of Sharjah, Dubai’s Emirates NBD, Mexico’s Mexichem SAB de CV, Chile’s Empresas CMPC SA, China Great Wall Asset Management Corp., Poland and Malaysia’s Cagamas.

© 2015 Prospect News.
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