China’s Redco prices; Russian notes underperform; EM&F sets marketing trip; Berau ahead

By Christine Van Dusen

Atlanta, July 25 – China’s Redco Properties Group Ltd. sold notes as most emerging markets assets finished the week on solid footing, with only bonds from Russia suffering as the European Union outlined sanctions against the sovereign.

“As we approach the weekend, the potential for military escalation and Western sanctions appears higher than ever,” a London-based analyst said.

The E.U.’s sanctions, following stricter penalties from the United States, were crafted after last week’s crash of a Malaysian Airlines flight in an area of Ukraine that is controlled by Russia-backed rebels.

By Friday, bank bonds from Russia were an average of 63 basis points wider while other corporates saw spreads move out about 42 bps, the analyst said.

Elsewhere in the emerging markets universe, bonds performed well, she said, with particular outperformance from Turkey, where positive economic reports pushed bank bonds about 17 bps tighter.

From the Middle East, most investment-grade names saw solid demand, and perpetual notes were popular, the analyst said.

In its new deal, Redco priced $125 million 13¾% notes due 2019 at par to yield 13¾%, matching talk, a market source said.

Hongkong and Shanghai Banking Corp. Ltd., ICBC International Capital Ltd. and Kingston Securities Ltd. were the global coordinators for the Regulation S offering.

The company plans to use the proceeds to refinance some existing debt, to finance its existing and new property development projects and for other general corporate purposes.

© 2015 Prospect News.
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