Industrial Bank of Korea, Croatia, Tanzania plan deals; Ukraine, Petrobras get attention

By Christine Van Dusen

Atlanta, Feb. 25 – Industrial Bank of Korea set talk, Croatia planned a roadshow and Tanzania renewed efforts to issue bonds on Wednesday as investors remained focused on Ukraine and considered selling bonds from Brazil-based Petroleo Brasileiro SA (Petrobras).

“Headlines suggest fighting in Ukraine has subsided, with sporadic rebel attacks,” a London-based analyst said. “At the same time, yesterday saw increasingly aggressive rhetoric on sanctions from the West.”

If fighting picks up this week, it is likely the United States could institute more sanctions against Russia.

“European leaders have been putting pressure on Russia as well, but we continue to believe obtaining unity on sanctions in Europe will prove difficult given Greece’s attitude,” he said.

Sovereign bonds widened Tuesday on the news and were unchanged on Wednesday morning, as were credit default swaps spreads, he said.

Investors were also watching Petrobras, which was cut to junk by Moody’s Ratings Service as a result of the continuing corruption scandal, a New York-based trader said.

From Turkey, spreads tightened on Tuesday after the Central Bank cut rates, as expected, and on Wednesday narrowed further, a trader said.

And bonds from Central and emerging Europe were firm, with some spreads as much as 5 basis points tighter, he said.

Looking to the Middle East, the session was busy, with support shown for long-dated assets, a London-based trader said.

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