Fixed Income Comment:With thin trading and little domestic news, Russia paper tracked UST, and spreads held ground at 163 bps

Comparatively easier oil prices, Brent closing over two dollars lower, at
US$57.18 pb as well as indications of more robust US consumer confidence,
constrained UST prices and sent yields higher. In late US trading yields on two
year paper moved to 3.565, whilst 10 year yields moved up to 3.972, following
the low at the start of the week. With thin trading and little domestic news, Russia
paper tracked UST, and spreads held ground at 163 bps. The key determinant
will be any move by the US Fed that is outside the general market consensus of
25 bps tightening of policy.
Russian Standard bank announced that it intends to tap the market for a 5 year
Rouble bond equivalent to US$ 175 million, whilst the car-maker AvtoVaz has
successfully placed its third Rouble bond, this time for 5 years and equivalent to
US$ 175 million. Impexbank has placed a 2-year Eurobond worth US$100 mln.
Fitch Ratings has assigned a long-term rating at level B- to the bond. Amtel
Holding is issuing US$175 million two-year credit linked notes (CLN) The CLN
has a 9.25% semi-annual coupon, with a one-year buy-back offer. Russia’s third
largest mobile operator MegaFon has secured loans organised by Commerzbank
and Bayerische Landesbank worth a total of Euro300 million. The planned use is
to fund its investment purchases from Siemens, which are expected to be
guaranteed by Germany’s Hermes and Italy’s SACE export agencies.
Power monopoly UES signed a landmark deal with the Danish government that
will allow Denmark to emit more greenhouse gases in exchange for modernising
two UES power plants. Under this agreement, Copenhagen will help cover the
costs of upgrading the Khabarovsk Krai and Orenburg power plants, reducing
emissions of carbon dioxide, by about 1.2 million tons. In return, Denmark will be
allowed to raise its own emissions by the same volume. Total investment into the
two plants will amount to Euro20 million.