Ghana, Nigeria greet buyers; Ukraine's picture improves; ambassadors leave Qatar

By Christine Van Dusen

Atlanta, March 5 - Buyers were seen for bonds from Ghana and Nigeria in trading on Wednesday as continued uncertainty about Ukraine kept the primary market quiet and headlines from Qatar moved spreads in the region wider.

Still, some good news did surface for Ukraine: The embattled sovereign has been offered €11 billion in loans and grants from the European Union. This followed the United States' offer of $1 billion in loan guarantees for Ukraine.

Up next is a summit on Thursday in Brussels where European leaders are expected to discuss Russia's involvement in Ukraine.

So far this week, sovereign bonds from Ukraine have moved up as much as 6 points, said Svitlana Rusakova of Dragon Capital.

Corporates and quasi-sovereign bonds also have traded up, but not quite as much as sovereigns, she said.

Taking a closer look at African bonds, ongoing demand was noted for names from South Africa, including Eskom Holdings, a trader said.

South African sovereign bonds have tightened as much as 60 basis points on the month, he said.

"Elsewhere, Egypt is firm and Morocco is doing well again," he said. "Angola is popular, and Zambia is even marked higher and tighter by 5 bps. Another fairly steady tone in this part of the world."

Qatar controversy eyed

In other trading on Wednesday morning, Qatar's Ooredoo QSC - formerly known as Qtel International - saw its 2023s and 2028s 7 bps wider, a trader said.

This came as Saudi Arabia, the United Arab Emirates and Bahrain announced plans to withdraw their ambassadors from Qatar due to the sovereign's support of the Muslim Brotherhood movement.

Many bonds from these places widened between 5 bps and 15 bps in response.

"The bottom line is, it's wider overall with defensive bids," the trader said. "Today was a long-overdue pull-back on a market devoid of shorts that has reacted to some internal tension being made glaringly public. Whether there are further ramifications and developments on this story only time will tell. Many mistakenly place all the Middle Eastern countries in one hat, when they are all quite different in subtle and varying ways."

Perpetuals move down

Perpetual notes from the Gulf region moved lower by between 50 cents and 60 cents, a trader said.

"Elsewhere, Bahrain was a little heavy and Bahrain Telecommunications Co. wider on the week," he said. "We also saw some paper around on Qatar National Bank and National Bank of Abu Dhabi after a very good run too."

Also on Wednesday morning, Dubai-based Emaar Properties' 2019s widened by 12 bps to 111½ bid, 112 offered.

"A very interesting day in what typically is a fairly steady and vanilla market," he said.

Russia in focus

Taking a closer look at Russia, the sovereign is still looking to issue eurobonds this year but "will not force the placement, under the current adverse market conditions," according to a report from UFS Investment Co.

"Taking into account the increased spreads of Russian eurobonds to U.S. Treasuries, and the fact that over the past four weeks countries didn't issue dollar-denominated eurobonds in the international capital markets, it would be wise for the Ministry of Finance to wait for some stabilization of the situation in the market and carry out the first placement in late spring or early summer," the report said.

In the meantime, UFS recommends that investors stick to Russian corporate bonds that carry an investment-grade rating and a coupon of 5% to 7%.

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