Issuance from AIA Group, Ezion Holdings; Russian comments give comfort; Finansbank ahead

By Christine Van Dusen

Atlanta, March 4 - China's AIA Group Ltd. and Singapore's Ezion Holdings Ltd. sold notes on Tuesday as broader markets took some comfort in comments from Russia related to the tension with Ukraine.

"Market movements continue to be dictated by geopolitical events, and [Russian President Vladimir] Putin's decision to withdraw his troops back in to their barracks will come as a relief to many who had feared a further escalation of events in Crimea," according to a report from Erste Group Research.

Putin also said that Russia would only take military action in Ukraine as a last resort. In response, Russian corporate bonds saw "grateful buyers, most of them Russian accounts," the report said.

"Steady day, all told," a London-based trader said. "Electronic sellers from yesterday appeared today as buyers on the platform, especially for beaten-up Russian banks."

In trading on Tuesday, pockets of value remained for bonds from Bahrain, Kuwait and Dubai, he said.

"Perpetuals ticked higher," he said. "GEMS is still powering along; it traded at 114 today. Fresh highs. Hats off to this little bond."

Latin American bonds put in another strong session, with corporates moving higher, a New York-based trader said.

"Supply is scarce and dealers are reluctant to dwindle whatever inventory they do have," he said.

Bonds from Brazil-based Petrobras, particularly the 2043s, traded frequently during Tuesday's session.

And Corporacion Nacional del Cobre de Chile (Codelco) saw its bonds tighten about 5 basis points, he said.

Yield movements among eurobonds from Central and emerging European were "very limited" on Tuesday, Erste Group said in its report.

Croatia was a notable exception - yields there rose 10 bps.

"As is typical in skittish markets, bid-ask spreads widened," the report said.

Finansbank seeks issuance

In other news on Tuesday, Turkey's Finansbank was considering a $750 million issue of Islamic bonds due in five years, a market source said.

No other details were immediately available.

Russia eyed

Taking a closer look at Russia, yields have been rising sharply so far this week, according to a report from UFS Investment Co.

The sovereign's 2023s rose Monday by 34 bps while the 2043s moved 40 bps amid concerns about sanctions related to Ukraine.

"The spreads of sovereign securities to U.S. Treasuries reached the maximum values from the date of placement of the sovereign Russian eurobonds six months ago," the report said. "We expect a slight correction in Russian eurobonds due to a number of supporting factors."

AIA prices notes

In its new deal, China's AIA Group priced a two-tranche issue of $1 billion notes due 2019 and 2044, a syndicate source said.

The deal included $500 million 2¼% notes due 2019 that priced at 99.634 to yield 2.328%, or Treasuries plus 80 bps.

The second tranche totaled $500 million 4 7/8% notes due 2044 that priced at 98.450 to yield 4.975%, or Treasuries plus 135 bps.

Citigroup, Deutsche Bank, HSBC and Morgan Stanley were the bookrunners for the Rule 144A and Regulation S deal.

AIA is a pan-Asian life insurance group based in Hong Kong.

Ezion sells bonds

Ezion Holdings priced S$55 million 5.1% notes due 2020 at par to yield 5.1%, a market source said.

CIMB and DBS Bank were the bookrunners for the Rule 144A and Regulation S deal.

Based in Singapore, Ezion specializes in marine logistics and support for the offshore oil and gas industries.

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