New issues from Shanghai Electric, Ecobank Nigeria; Russia headlines suppress risk appetite

By Christine Van Dusen

Atlanta, Aug. 7 – China’s Shanghai Electric Group Corp. and Ecobank Nigeria Ltd. sold notes on a slow Thursday as the growing conflict in Russia and Ukraine dinged investor confidence and pushed Russian bonds down.

“Global risk sentiment remains weak, as European growth concerns and escalating tensions surrounding the Ukraine situation dominate holiday-thinned markets,” according to a report from Barclays. “Russia has now decided to ban agricultural imports from countries that supported sanctions.”

The sovereign announced it will no longer allow agricultural imports from the United States, the European Union, Australia, Canada and Norway. And news agencies reported that more Ukrainian soldiers have been killed in clashes with pro-Russia separatists.

“It seems that at this stage the military hostilities in the East are mostly priced in, though a direct Russian invasion is, of course, not,” said Svitlana Rusakova of Dragon Capital.

Still, spreads from other areas of emerging markets managed to stabilize following Wednesday’s sharp widening, according to the Barclays report.

Also on Thursday, Ukrainian agricultural company Mriya Agro Holdings saw its bonds dip on the news that the company failed to make payments on some debt and warned that some restructuring may be necessary.

From Latin America, some bonds saw an uptick on Thursday morning, a New York-based trader said.

Spread-based credits moved as much as 4 basis points tighter early in the session while high-grade issues were mixed and high-yield names continued to struggle, he said.

By midday, the market paused a bit on geopolitical concerns, and the Petroleo Brasileiro SA (Petrobras) curve got “slammed,” he said.

Shanghai Electric sells notes

In its new deal, China’s Shanghai Electric Group priced $500 million 3.04% notes due 2019 at a yield of 3.04%, or Treasuries plus 140 bps, a market source said.

The notes priced tighter than talk, set in the 165 bps area.

Goldman Sachs, Deutsche Bank, JPMorgan, Barclays, BNP Paribas, Guotai Junan, Huatai Financial and ICBC International were the bookrunners for the Regulation S deal.

Ecobank Nigeria prints bonds

Ecobank Nigeria priced $200 million notes due in 2021 at a yield of 9%, a market source said.

The notes were talked at a yield in the high-9% area.

Deutsche Bank and Standard Chartered Bank were the bookrunners for the deal.

No other details were immediately available on Thursday.

Findeter prices issue

On Wednesday, Colombia’s Financiera de Desarrollo Territorial SA (Findeter) priced 946.175 Colombian peso notes – equivalent to $500 million – due Aug. 12, 2024 with a 7 7/8% coupon, a market source said.

The notes, which were talked in the 8¼% area, are payable in dollars.

BofA Merrill Lynch and Deutsche Bank were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for general corporate purposes.

Findeter is a banking company based in Bogota.

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