Emerging markets hushed as holiday nears; primary 'shut;' investors await Dubai standstill plan

By Christine Van Dusen

Atlanta, Dec. 21 - Emerging markets were nearly silent on Monday as issuers and investors hunkered down for the upcoming holiday, washed their hands of 2009 and looked ahead to the New Year, market sources said.

"It's dead here," a London-based market source said. "I would suggest the new issue market is now shut for the year."

A New York-based source shared the same sentiment later in the day.

"There's absolutely nothing," he said. "It has closed up. If there was any chance of anything happening, it would've happened today."

That means Latvia's planned euro-denominated offering of notes, the Dominican Republic's expected benchmark dollar-denominated sovereign global bonds and possible issues from Iran, Romania and Slovenia likely won't come until 2010.

Other issuers to watch out for in January and the first quarter of the new year, according to market sources, include: Korea National Oil Corp., Panama, Vietnam, Poland, Angola, the Philippines and Buenos Aires.

Watching Dubai

For now, though, what investors and issuers are focusing on is what will happen with Dubai World's plan to restructure more than $20 billion of its debt.

The government-owned development company met Monday with banks to determine how to move forward with a debt freeze but did not reach a standstill agreement by the European close, sources said. Later in the day, the company said it would need more time to present a good standstill plan.

Dubai World on Nov. 25 announced plans to freeze up to $59 billion of debt, then later reduced the amount to $26 billion. About $4 billion of the company's Nakheel PJSC bond was repaid last week after Abu Dhabi chipped in a $10 billion loan.

Now, with uncertainty surrounding the rest of the debt and how its restructuring will be handled, "people are just watching Dubai World headlines," the London-based source said.

On the secondary side, things were also very quiet Monday in anticipation of a shortened week due to the Christmas holiday.

"My traders haven't been sending that many runs out," the New York-based market source said. "I think it's pretty quiet.

"It looks like most of the sovereigns are holding in there. Mexico is up a little, Brazil is down a little, Colombia is flat.

"There's just no volume," he said.

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