Sovcomflot, Evraz tap primary market; backdrop remains ‘favorable’; Oman trades higher

By Christine Van Dusen

Atlanta, June 9 – Russian issuers continued their march to market on Thursday, with pricing from names like PAO Sovcomflot and Russia's Evraz Group SA, as sentiment for emerging markets assets remained strong.

“The favorable backdrop remains in place, ever since last week’s nonfarm payrolls,” a London-based strategist said. “The U.S. 10-year Treasuries have further dropped below the 1.7% threshold while oil prices continue to climb upwards.”

Investors are “betting the Fed will not hike in June and July meetings,” according to a report from Schildershoven Finance BV. “Meanwhile, the Chinese economy shows some positive fundamental signs.”

In trading, credit from South Africa continued to benefit from “positive surprises” from ratings agencies, the strategist said.

Moody's Investors Service, S&P and Fitch Ratings have all affirmed the sovereign's rating, even as political risk has risen.

The agencies expect “that the government will remain committed to fiscal and economic reforms,” he said.

In response, bonds have tightened as much as 20 basis points since last Thursday, he said.

The new issue of notes from Oman – a $2.5 billion dual-tranche deal – was trading above reoffer on Thursday morning, a trader said.

The $1 billion 3 5/8% five-year notes that priced at 99.887 to yield mid-swaps plus 245 bps were spotted at 100.24 bid, 100.34 offered.

The $1.5 billion 4¾% 10-year notes that priced at 99.827 to yield mid-swaps plus 320 bps traded Thursday at 100.60 bid, 100.80 offered.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.