FlyDubai sells notes; Russia, Ukraine conflict goes on; BBVA news boosts GarantiBank bonds

By Christine Van Dusen

Atlanta, Nov. 19 – Dubai Aviation Corp. (FlyDubai) printed new notes on Wednesday as investors focused on news from Russia, Ukraine, Brazil’s Petroleo Brasileiro SA (Petrobras), Peru’s BBVA Banco Continental SA and Turkey-based GarantiBank International NV (GarantiBank).

BBVA is seeking to increase its ownership of GarantiBank from 14.9% to 39.9% by purchasing shares from Turkish holding company Dogus Holding AS, a London-based analyst said. This would not necessitate the launching of a tender offer, according to BBVA.

The news was positive for GarantiBank’s bonds on Wednesday; the notes tightened by 7 basis points to 9 bps on Wednesday morning.

“However, it is too early to get excited about a possible full takeover,” he said. “On the face of it, it appears BBVA is also deliberately buying a stake that does not force a full take-over. Although positive for Garanti, we think spread tightening will be limited.”

Also on Wednesday, bonds from Russia were weaker as a result of the ongoing tensions with Ukraine, he said.

So far this week, the 2015 and 2017 bonds from Ukraine have seen balanced flows, said Svitlana Rusakova of Dragon Capital.

But the long end of the curve is “still heavy,” she said, and pushed the curve slightly lower overall.

Quasi-sovereign issuer State Export-Import Bank of Ukraine (Ukreximbank) saw its 2015 outperform, moving up a ˝ point.

“Corporates were generally still offered and illiquid,” she said.

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