Poland's Ciech prices; spreads mostly unchanged; Ukraine gets attention; Mongolia ahead

By Christine Van Dusen

Atlanta, Nov. 21 - Poland's Ciech SA sold notes on a quiet pre-Thanksgiving Wednesday that saw emerging market investors focusing on the financial problems in Greece and the violence in Gaza.

"News that the euro group and IMF had failed to come to an agreement on Greece's debt reduction profile initially prompted a marking lower of risk assets, but this reaction quickly unwound," according to a report from Barclays. "Sentiment will be tested further in the coming days."

In trading, activity was sluggish, though the Ukraine notes and the recent issue from Mexico's Alpek SAB de CV managed to perform well.

"Fixed income markets continue to bobble around without any real direction," according to a report from Erste Group Research.

The Markit iTraxx SovX index spread was unchanged early Wednesday while the corporate index was wider by 1 basis point.

"Today we anticipate a marginal decline," UFS Investment Co. said in a report. "Market environment is moderately negative so far."

In deal-related news, Mongolia is planning to issue up to $5 billion of bonds.

The proceeds will be used for infrastructure and utility projects, according to a report from Standard & Poor's.

And Turkish lender Yapi ve Kredi Bankasi AS will hold investor presentations next week for an issue of subordinated notes, a market source said.

Bank of America Merrill Lynch, Mitsubishi UFJ Securities, Morgan Stanley and Unicredit are the bookrunners for the marketing trip.

On Monday, a breakfast will take place in Dubai and a lunch in Abu Dhabi.

Ciech sells notes

In its new deal, soda ash producer Ciech priced a €245 million issue of seven-year senior secured notes at par to yield 9½%, at the tight end of the 9½% to 9¾% yield talk.

Joint bookrunner Credit Suisse will bill and deliver for the Rule 144A and Regulation S deal. Barclays was also a joint bookrunner.

In addition to the euro-denominated deal, the financing included 382 million zloty of notes sold into the domestic market, according to a debt capital markets banker in London who added that the zloty deal terms were not widely circulated.

The deal played mostly to European high-yield accounts and was well received, the banker said. There was limited participation from emerging markets investors.

African bonds stand out

Overall, emerging markets bonds attempted to rally during the week on the back of a better tone in equities, but encountered resistance, a London-based market source said.

There were some exceptions, though; Zambia, Senegal, Ghana, Morocco and Egypt saw some buying interest.

And from the Middle East, some buying was seen for long-end Qatar bonds and Abu Dhabi corporate names, she said.

"Low turnover and global sentiment dictates the days' moods," according to a report from Erste Group Research.

New Ukraine notes 'attractive'

From Ukraine, sovereign bonds were holding up well by mid-week.

The new $1.25 billion issue of 7.8% notes due 2022 that priced at par to yield 7.8%, or Treasuries plus 618.7 bps was seen at 101 before dipping to 100¼ bid, 100¾ offered, said Svitlana Rusakova of Dragon Capital.

JPMorgan, Morgan Stanley, Sberbank and VTB Bank were the bookrunners for the deal.

"The bond remains attractive," according to the report from UFS, which rates the bond a "buy."

Ukraine corporates quiet

Ukraine's existing 2020s and 2021s gained about 3/4-point despite some profit taking, she said.

"Corporates were silent," she said, noting that Metinvest's 2015s were unchanged at about 101½ bid, 102½ offered.

Oschadbank's bonds were seen at 94 bid, 95 offered.

Paul A. Harris contributed to this article.

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