Tensions in Russia continue, sending CDS wider; Berau, Paraguay, Greenland Hong Kong hit road

By Christine Van Dusen

Atlanta, July 28 – Several emerging markets issuers – including Singapore’s Berau Capital Resources II Pte. Ltd., Paraguay and China’s Greenland Hong Kong Holdings Ltd. – scheduled roadshows as tensions continued in Russia and Ukraine on an otherwise slow Monday for the asset class.

Credit default swap spreads from Russia were weak on Monday, widening about 9 basis points, a London-based analyst said.

“Corporates are being badly hit,” he said, noting that OAO Lukoil’s short-end was 55 bps wider while Gazprombank’s was 35 bps wider. “Tensions appear to show no sign of dissipating.”

Looking to Latin America, the bond market was quiet on Monday, a New York-based trader said.

“Quite the ho-hum start to the week, as we left off the same way on Friday as well,” he said.

Brazil-based Petroleo Brasileiro SA (Petrobras) saw its bonds move out by a few basis points amid dwindling liquidity, he said, while banks from Colombia managed to hold on to some gains.

Mexico-based Cemex SAB de CV’s bonds struggled, with fewer sellers, he said. And Brazil-based Vale SA’s notes moved out about 2 bps into the close.

Activity is expected to pick up on Tuesday, the New York trader said, as investors prepare for some economic data announcements from the United States.

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