Russia markets first deal post-sanctions; light inquiry, volumes for EM; Marfrig on roadshow

By Christine Van Dusen

Atlanta, May 23 – Russia on Monday set talk for a new eurobond – its first since Ukraine-related sanctions were imposed in 2013 – during a session that saw limited inquiry and volumes for many emerging markets names.

“Very light ... with a bit of weakness creeping in after Friday’s ‘rebound,’” a New York-based trader said at midday. “No follow-through at all, after losing steam into Friday’s close as well.”

The curve for Brazil-based Vale SA was “in neutral, certainly not getting any help from some the more liquid Brazilian corporates or sovereign cash,” he said. “Most high-grade credits are trading sideways to slightly lower.”

Institutional investors seem to lack the conviction to add, he said, but “are still constructive overall,” he said. “Chile and Mexico high-grade continued to hold onto their gains, the strongest after the run higher in March and April.”

Meanwhile, banks and corporates from Colombia were fading, with little selling to speak of, he said.

For its planned issue of benchmark-sized and dollar-denominated notes due in 10 years, Russia set initial price guidance at 4.65% to 4.9%, a market source said.

The deal – with VTB Capital as the sole bookrunner – received a lot of attention on Monday, with demand reportedly reaching more than $5 billion.

In other news, Brazil’s Marfrig Global Foods SA is on a roadshow for a possible issue of new senior notes that are being offered alongside a tender offer, a market source said.

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