Russia talks euro notes to yield about 3%; Abu Dhabi’s Senaat launches $300 million sukuk

By Rebecca Melvin

New York, Nov. 27 – Russia’s announcement on Tuesday that it is pricing a new euro-denominated benchmark of seven-year notes came as something of a surprise to the market in light of heightened tensions in the Central and Eastern Europe region after Russia seized three Ukrainian navy ships and wounded six sailors on Sunday.

The action caused Ukraine on Monday to impose martial law for 30 days in areas bordering Russia, and many in the international community including the United Nations Ambassador Nikki Haley condemned the action.

Nevertheless, Russia was talking a deal on Tuesday that was expected to be €1 billion in size with a yield of about 3%. Russia’s existing bonds, which fell on Monday, remained weak on Tuesday.

“Pricing looked a little generous, but given everything that has been going on, I guess it’s not that surprising,” a London-based market source said regarding the new Russia bond.

“I thought the Russian new issue went OK,” the source said, adding that it looked like the sovereign was going for size over pricing.

Elsewhere, Senaat General Holding Corp. PJSC launched a seven-year Islamic bond, or sukuk that was downsized to $300 million from $600 million.

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