Yesterday, pressure in the Russian bonds space mounted. In high grades, subordinated GPBRU 23 (YTM 10.12%) lost 2.3pp in price and RSHB 23 (YTM 10.20%) declined 1.7pp, while GPBRU 19 (YTM 8.32%) and SBERRU 23 (YTM 8.33%) edged down 0.8pp. Perpetuals VTB (YTC @2022 12.45%) plummeted 2.9pp and GPBRU (YTC @2024 9.42%) declined 1.4pp, price-wise. Amid the news of operational disruptions in Solimask-2 potash mine, URKARM18 (YTM 7.50%) plunged 2.9pp in price. Thus, its spread vs. NLMK18 and PHORRU18 soared to 90-100bp (for more spread updates, see yesterday’s Spread Book). Russian sovereign issues
looked a bit more resilient: the other curve slipped just 0.2-0.4pp, price wise. In the sub-investment grade spectrum, subordinated RUSB bonds, VOSTOK 20 (YTM 14.97%) and FESHRU 20 (YTM 27.83%) were under fire, followed by TRUBRU notes, which eroded 1.2pp in price. Other metal and mining names corrected down 0.3-0.9pp in price. In contrast, the CIS space was trading rather well, with short Ukrainian names enjoying good demand. OSCHAD 18 (YTM 20.22%) hiked 1.8pp in price, Ukrainian sovereigns firmed 0.3-0.6pp in price. Among laggards, we highlight DTEKUA 18 (YTM 26.90%), which lost 0.5pp in price, and the KZOKZ curve, widening 5bp in yield.
Maxim Korovin, Tatiana Zueva
VTB Capital analysts
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