Bancomer and Sritex sell notes; concerns increase for Ukraine, Russia conflict

By Christine Van Dusen

Atlanta, Nov. 7 – Mexico’s BBVA Bancomer SA and Indonesia’s PT Sri Rejeki Isman Tbk. (Sritex) sold notes on Friday as bonds from Ukraine continued to weaken on concern that Russia could be sending more of its military vehicles across the border.

Ukraine officials accused Russia of moving tanks into Eastern Ukraine, a claim denied by Russian officials. In response to concern about this possible escalation in the conflict, Ukraine sovereign bonds fell about a point into the end of the week, a trader said.

“With limited activity in corporates and quasi-sovereigns, those were marked a half-point to one point lower,” she said.

Meanwhile Russia’s 2030 bonds were trading between 110¾ and 111¼ while the sovereign’s 2043s and 2042s moved about 1¼ points lower, a London-based trader said.

“Flows seem to be balanced at these levels,” he said.

Russia’s credit default swaps spreads for Russia were seen at 276 basis points over Treasuries, off an earlier wide of 285 bps.

In other news on Friday, Mexico-based construction company Empresas ICA SAB de CV could sell bonds in 2015, a market source said.

The notes could be backed by public works projects.

In its new deal, Mexico’s Bancomer priced $200 million 5.35% notes due Nov. 12, 2029 at 99.786 to yield Treasuries plus 300 bps, a market source said.

BBVA and Goldman Sachs were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to increase regulatory capital and for general corporate purposes.

Bancomer is a Mexico City-based financial institution.

Sritex sells bonds

In another new deal, Indonesian textile manufacturer Sritex priced a $70 million tap of its 9% notes due April 4, 2019 at 104.25, matching talk, a market source said.

Barclays was the bookrunner for the Regulation S deal.

The proceeds will be used for general corporate purposes.

Eurasian Bank prints notes

On Thursday, Kazakhstan’s JSC Eurasian Bank sold $500 million 7½% notes due Nov. 6, 2017 at par to yield 7½%, a market source said.

Eurasian Bank and Renaissance Broker were the bookrunners for the Regulation S deal.

The bank is based in Almaty, Kazakhstan.

China bank deal oversubscribed

The final book for China Construction Bank Corp.’s new RMB 2 billion 4.9% notes due Nov. 12, 2024 was $13.7 billion from 142 orders, a market source said.

The notes came to the market at par via CCB International, Goldman Sachs, HSBC (joint global coordinators) and Credit Suisse, Morgan Stanley and UBS (joint lead managers).

The proceeds will be used to boost tier 2 capital.

About 99% of the orders went to Asia and 1% to Europe, with insurers picking up 48%, fund and asset managers 41%, private banks 7% and banks and others 4%.

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