Russian bonds see heavy selling; Lippo Karawaci prices; Georgian Oil and Gas tightens talk

By Aleesia Forni and Paul A. Harris

Columbus, Ohio, May 9 - Though French President-elect Francois Hollande's win in France and Greece's vote against austerity were "for the most part expected," market sources in the emerging markets space in both London and New York see investors continuing to react to the news and "backing away from risk."

The Markit iTraxx Crossover S17 index, a measure of the appetite for risk among bond investors focused on Europe, was 693 basis points bid at noon ET, wider from the open by 16 bps.

Meanwhile, cash bond markets widened across the board on the day, according to a London-based source.

"Flow wise, retail is still very much involved, buying all the usual bank and corporate names," the source added.

Russia's sovereign bond due 2022 was 15 bps wider on the day, and the bonds from Sberbank and VTB Capital saw heavy selling.

One London-based trader saw investor interest focused on the sovereign bonds from Lebanon, Qatar and Abu Dhabi, as all three closed higher on the day.

Dubai also provided a large amount of volumes on the day, as credit default swaps were up to 360 and 362 late in London's session.

In the primary market, PT Lippo Karawaci Tbk priced a $150 million issue of notes, while Georgian Oil and Gas Corp. JSC tightened price guidance on its proposed notes offering.

Lippo Karawaci notes

Indonesia's Lippo Karawaci priced $150 million 7% notes due 2019 at 99.32 to yield 7 1/8%, according to a market source.

Citigroup, Deutsche Bank and Raiffeisen Bank were the joint bookrunners for the Regulation S deal.

The notes are non-callable for four years.

Georgian Oil price talk

Wednesday's primary also saw Georgian Oil and Gas lower guidance on its proposed five-year offering of notes to 7¼% to 7½%, which is moving closer to what one source believes is a "fair value" of 7%.

Initial guidance was set at 7½% to 7¾%.

JPMorgan and Goldman Sachs are managing the deal.

PTTEP Canada roadshow

Also in the primary, Thailand's PTT Exploration & Production plc's subsidiary, PTTEP Canada International Finance Ltd., will meet with fixed-income investors this week ahead of a possible debt offering, according to a market source.

Citigroup, Deutsche Bank, HSBC and UBS will arrange the meetings.

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