Russian pipeline starts to gush

The optimistic tone for issuance that started at the end of last week and that gave rise to TMK’s $400m three-year issue on Friday has gathered pace, pushing more Russian corporates out of the pipeline. On Monday, Ba2/BB/BB rated steel company Severstal priced $1.25bn of five-year Reg S/144A notes at 9.75%, the tight end of 10% area guidance. ABN Amro, BNP Paribas and Citigroup were the bookrunners. The bonds have gone on to tighten to 100.625-100.6875, or 9.61% yield from their par 9.75% reoffer. And yesterday, Gazprom priced $500m of five year paper at 310bp over mid-swaps, inside price talk of 315bp-325bp over. Morgan Stanley was sole bookrunner. Bankers away from the deal thought the deal cheap, coming some 110bp back of Gazprom’s five-year CDS. Read EuroWeek on Friday for full analysis on these issues and the outlook for the new issue market for emerging borrowers.