China Oceanwide sets maturity for notes; Russia, Ukraine crisis continues; Turkey narrows

By Christine Van Dusen

Atlanta, Aug. 29 – China Oceanwide Holdings Group Co. Ltd. (COHG) set the tenor for an upcoming issue of notes on a Friday that had investors continuing to eye Russia and Ukraine, where there were no signs of reconciliation.

“Any hopes for a peace deal following the Minsk meeting earlier this week have been dashed,” a London-based analyst said. “The opening of a new front in the South East of Ukraine will distract the Ukrainian army from its focus on Donestk and Luhansk and will likely serve to extend the conflict.”

Further sanctions against Russia are expected, he said.

“How those sanctions would look is still unclear at this stage, but considering that the financial sector has already been largely sanctioned, an extension of sanctions on the energy sector seems the most likely,” he said. “The week ends with tensions as high as at any point in this conflict.”

In response, bonds from Ukraine and Russia steadily declined during the week, with the Russian notes widening an average of 56 basis points, a London-based trader said.

On the corporate side, OAO Sberbank’s 2024s moved out 108 bps by the end of the week, the trader said. Gazprombank fared better, with the 2019s widening 40 bps.

“Euro paper also generally performed better as the prospects of quantitative easing in Europe increased,” the analyst said. “Oil- and gas-linked names were particularly under pressure.”

He pointed to OAO TMK’s 2018s, which widened 75 bps, and OAO Lukoil’s 2019s, which moved out 69 bps on the week.

Turkey tightens

Looking to Turkey, banks were about 4 bps tighter on average, but trading was limited, the analyst said.

Meanwhile, bonds from Middle Eastern lenders were about 1 bp wider, with Burgan Bank the top underperformer. Its 2020s moved out 16 bps he said.

“Corporates were 1 bp tighter on average,” he said. “Dubai Holding was active, and there was good demand for long-dated paper.”

Buyers were also seen for the perpetual notes from Majid al Futtaim Holding, which tightened about 10 bps on the week.

China Oceanwide sets tenor

China Oceanwide Holdings has set the tenor at five years for its upcoming issue of dollar-denominated notes, a market source said.

Citic Securities and UBS are the bookrunners for the deal.

The proceeds will be used for land acquisitions.

The company is a real estate business based in Beijing.

Rwanda prints notes

On Thursday, Rwanda priced RWF 15 billion 11 7/8% notes due 2019 at a yield of 12%, according to an announcement from the sovereign.

The deal drew a total book of RWF 34.8 billion from 91 bids, with orders coming from Canada, France, Belgium, Mauritius, Kenya and Tanzania.

No other details were immediately available on Friday.

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