Crisis in Ukraine casts a pall; EM trading activity limited; Far East Horizon to hit the road

By Christine Van Dusen

Atlanta, April 21 - The crisis in Ukraine remained in focus on Monday amid limited trading activity for emerging markets bonds as many investors continued to observe the Easter holiday.

Though the end of last week saw the United States, the European Union, Ukraine and Russia reach an agreement that was designed to limit violence - news that inspired a rise in quotes for bonds from Russia - tensions flared again on Sunday after a shootout at a checkpoint near Slavyansk.

The situation remained tense on Monday as rebel gunmen refused to leave the government buildings they have been occupying in parts of eastern Ukraine.

"We expect an upturn of the market of eurobonds in the second half of the day on Monday and in early trading on Tuesday," an analyst wrote in a report for UFS Investment Co. "We note, however, that armed clashes in some regions of the eastern part of Ukraine last weekend will keep back the strengthening of the market at the beginning of the week."

The market's strength also could be affected by economic data set for release this week from the United States and China, a market source said.

In deal-related news, China's Far East Horizon Ltd. will set out on Tuesday for a roadshow to market a Singapore dollar-denominated issue of notes, a market source said.

DBS Bank and Standard Chartered Bank are the bookrunners for the Regulation S deal, part of the company's $3 billion medium-term note program.

Far East Horizon is a financial leasing unit of Sinochem Group, which is a Hong Kong-based business conglomerate with interests in agriculture, energy, chemicals, real estate and finance.

Poly deal oversubscribed

The final book for China-based Poly Real Estate Group Co. Ltd.'s recent $500 million issue of 5¼% five-year notes was more than $1.5 billion from more than 105 accounts, a market source said.

The notes priced at 99.9375 to yield Treasuries plus 375 basis points on Wednesday with Citic Securities and HSBC in a Regulation S deal.

About 95% of the orders came from Asia and 5% from Europe, with 42% from fund managers, 30% from banks, 13% from insurers, 13% from private banks and 2% from corporates.

The Guangzhou, China-based issuer develops and sells residential homes and manages and leases properties.

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