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Russia/CIS bonds: subordinated banking bonds outperform

 
02.09.2013
On Friday, price dynamics in the Russia/CIS universe were mild. Most of the bonds either remained unchanged or the price action was no more than 25bp. Sovereign bonds were little changed: RUSSIA 22 (YTM 4.49%) dropped 12bp in price, while the others were stable. In the corporate segment, we would like to note EUCHEM 17 (YTM 5.62%), VIP 21 (YTM 7.10%) and VIP 22 (YTM 7.28%) outperformed other names. The bonds surged 50-75bp in price and their spreads to the benchmark tightened 3-8bp. Overall, spreads to swaps widened 5-6bp on average across the bond universe. In the banking space, we would like to highlight the outperformance of the subordinated bonds issued by quasi-sovereign names, in particular VTB and SBERRU. In the last few days, SBERRU 23 rose almost 120bp, RSHB 21 gained 50bp and VTB 22 surged 100bp. Overall, activity is likely to be subdued today, and will be defined by US economic releases this week.
Maxim Korovin, Anton Nikitin
VTB Capital analyst

Tags:
bonds

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