Russian credit default swap spreads widen; Entel dips; Lebanon, Kipco bonds rise

By Christine Van Dusen

Atlanta, July 21 – Credit default swap spreads for Russia widened about 13 basis points on Monday morning as tensions with Ukraine remained high in the wake of the crash of a Malaysian Airlines flight.

“We are opening slightly weaker this morning,” a London-based analyst said.

The public outcry at the plane crash – which is believed to have been caused by a surface-to-air missile – and Western leaders’ hawkish responses led investors to cover shorts in the Ukraine sovereign, according to Svitlana Rusakova of Dragon Capital.

“This was quite a difficult task, considering how squeezed many bonds remained,” she said.

Looking to Latin America, corporate bonds were mostly quiet on Monday, with the limited action focused primarily on selling, a New York-based trader said.

The new issue of notes from Chile-based Empresa Nacional de Telecommunicaciones SA (Entel) – 4¾% notes due 2026 that priced at 99.763 to yield Treasuries plus 230 bps – was trading below fixed reoffer on Monday, he said.

Meanwhile, Lebanon’s 4¾% notes due 2016 that priced at 99.98 traded Monday at 101.37 bid, 102.37 offered, the trader said.

Blom Bank and Citigroup were the bookrunners for the Regulation S deal.

And Kuwait Projects Co.’s (Kipco) 4.8% notes due 2019 that priced at par moved Monday to 103.62 bid, 104.12 offered, he said.

BNP Paribas, HSBC and JPMorgan were the bookrunners for the Regulation S deal.

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