Russia in focus after Crimea annexation; Minerva, Vibrant, Pertamina, Buenos Aires plan issues

By Christine Van Dusen

Atlanta, March 21 - Bonds from Russia and its corporates were eyed on Friday after the sovereign's parliament signed a bill to annex Crimea from Ukraine. This move prompted the European Union to impose new sanctions, primarily on Russian officials.

"As another turbulent week in [emerging markets] comes to a close, all focus today is on the reaction to yesterday's U.S. sanctions," a London-based analyst said.

Though the sanctions remain light and mostly focused on Russian individuals, Russia-based lender Bank Rossiya and Cyprus-headquartered Gunvor Group Ltd. - the largest supplier of crude oil in Russia - have been placed on the list, she said.

"Gunvor bonds are down about 12 points," she said. "Names like OAO Novatek have also been affected."

Paper from Russia was weaker and illiquid by Friday, but because the bonds rallied Tuesday, most names ended the week on a stronger note, she said.

"Russian banks end the week 55 basis points tighter," she said. "There was notable demand for Gazprombank perpetuals and VTB perpetuals. Both are more than 100 bps tighter after recent underperformance."

Vnesheconombank bucked the trend, however, after the Russian finance minister said there were fewer resources available to support banks, she said.

"Russian corporates were also better on the week, about 45 bps tighter on average, with high-yield names generally outperforming the more stable investment-grade names," she said. "Evraz Group was the clear top performer, with its '18s 135 bps tighter."

OAO Severstal was another standout, as was Alliance Oil and its 2020s.

Also on Friday, Brazil's Minerva SA set out on a roadshow, Singapore's Vibrant Group Ltd. and Indonesia's PT Pertamina mandated banks, and Buenos Aires was pondering a bond issue.

Turkey banks tighten

Bonds from Turkey put in a strong week, with banks tightening as much as 17 bps by Friday, a trader said.

"But Moody's review for the downgrade of 10 banks will likely have raised some concerns," she said. "Finansbank generally underperformed."

Many Turkish corporates tightened during the week by as much as 25 bps.

The Middle East remained rock-solid at the end of the week, driven by high liquidity, demand for paper and scant issuance, the analyst said.

"Perpetual bonds were in demand while we saw good buyers of Kuwait paper," she said.

Lat-Am in focus

Looking to Latin American corporate bonds, the tone was skittish at the end of the week, a New York-based trader said.

"We sit here, from a few days ago, markedly tighter on the most price-based, high-grade credits," he said. "Some are approaching all-time tights, which leads to a skittish feelings, with some dealers seemingly playing it close to the vest for now."

Bonds from Colombia's Ecopetrol SA were active at the end of the week, he said.

Minerva markets notes

Brazil's Minerva SA set out on Friday for a roadshow to market a dollar-denominated issue of perpetual notes, a market source said.

BofA Merrill Lynch, HSBC and Itau BBA are the bookrunners for the Rule 144A and Regulation S deal.

The roadshow started Friday in Santiago and will travel to Miami, Hong Kong and New York before concluding on March 26 in Zurich, Geneva and London.

Minvera is a food processing company based in Barretos, Brazil.

Vibrant sets roadshow

Singapore's Vibrant Group has mandated DBS Bank to arrange a roadshow starting March 24, a market source said.

The roadshow will be held in Singapore.

No other details were immediately available on Friday.

Vibrant is logistics, real estate and financial services group.

Pertamina picks banks

Pertamina has mandated Barclays, Citigroup and HSBC as bookrunners for its upcoming issue of $3 billion of Islamic bonds, a market source said.

Pertamina is a state-owned oil and gas company based in Jakarta, Indonesia.

And for Argentina, Buenos Aires is looking to issue bonds in 2014, a market source said.

No other details were immediately available on Friday.

IDBI draws orders

India-based IDBI Bank Ltd.'s new $300 million issue of 5% notes due 2019 drew a final order book of more than $2 billion from more than 196 accounts, a market source said.

The notes priced at 99.71 to yield 5.061%, or Treasuries plus 350 bps.

About 77% of the orders came from Asia and 23% from Europe.

Banks picked up 40%, fund managers 39%, private banks 15% and insurers 6%.

BNP Paribas, Citigroup, Credit Agricole, HSBC and RBS were the bookrunners for the Regulation S deal.

The notes will include a change-of-control put at 100.

ALFA sells bonds

On Thursday, Mexico's ALFA SAB de CV priced a two-tranche issue of $1 billion notes due 2024 and 2044 in a Rule 144a and Regulation S deal, a market source said.

The deal included $500 million 5¼% notes due 2024 that priced at 99.77 to yield 5.279%, or Treasuries plus 250 bps.

The second tranche of $500 million 6 7/8% notes due 2044 priced at 99.497 to yield Treasuries plus 325 bps.

Credit Suisse, Goldman Sachs, JPMorgan and Morgan Stanley were the bookrunners for the deal, which included a change-of-control put at 101.

ALFA is a business conglomerate based in San Pedro Garza Garcia, Mexico.

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