China Construction Bank sells notes; Russian, Lat-Am bonds tighten; Naspers gets downgraded

By Christine Van Dusen

Atlanta, Aug. 13 – China Construction Bank (Asia) Corp. Ltd. sold new notes during a risk-on Wednesday that saw Russian notes tighten as investors awaited news on the truck convoy traveling to Ukraine.

“Overall, tensions and suspicions remain ever-present, but the market does appear to be focusing on the positive headlines and potential for a deal on the aid,” a London-based analyst said.

Indeed, credit default swap spreads for Russia tightened by 6 basis points while Russian banks saw their bonds narrow by between 10 bps and 15 bps, the analyst said.

“Russian corporates are also better,” he said, pointing to the 10-bps tightening by OAO Rosneft. “Elsewhere, Turkey sovereign cash is circa 5 bps tighter, helped by the generally better tone.”

From the Middle East, flows were steady and active on Wednesday, a London-based trader said.

“Impressive day, especially given that we are in mid-August,” he said. “In the region, there is good demand as investors return from holidays.”

In other news, South African mass media company Naspers Ltd. was downgraded from BBB- to BB+ by Fitch Ratings.

From Latin America, flows were solid and inquiries were balanced as spreads for low-beta sovereigns tightened between 4 bps and 5 bps, a New York-based trader said.

And the tone was positive for high-grade names, in light of the rally in equities.

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