EM assets still fairly strong amid concern about Greece; JBS-Friboi, Lebanon plan deals

By Christine Van Dusen

Atlanta, May 13 - Though continued concerns about Greece and the pace of the global economic recovery put the primary market on pause, emerging markets investors remained fairly relaxed on Friday, showing some love for recent issues from Nigeria's GTB Finance BV, Senegal and - to a lesser degree - Turkey's Finansbank AS.

"The mood across risk assets, including EM, remained very edgy this week, though we did not detect any en masse panic liquidation of EM assets, and investors seemed to be marginally calmer," according to a report from RBC Capital Markets.

The JPMorgan Emerging Markets Bond Index spread was unchanged Friday, at Treasuries plus 271 basis points.

On the deal front, several issuers moved forward with their plans for notes, including Brazil's JBS-Friboi SA, Mexico's Comision Federal de Electricidad (CFE), Chile's Automotores Gildemeister SA, China's Lonking Holdings Ltd., China's GCL-Poly Energy Holdings Ltd., Lebanon, Serbia and Poland's Polskie Gornictwo Naftowe i Gazownictwo (PGNiG).

Friboi taps bookrunners

Brazilian beef and pork processor JBS-Friboi mandated Bank of America Merrill Lynch, JPMorgan, Banco do Brasil, Barclays Capital and Morgan Stanley for a $1 billion issue of eight- and 10-year notes, a market source said.

The notes due 2019 will be non-callable for three years. The notes due 2021 will be non-callable for four years.

The Rule 144A and Regulation S transaction is expected to come to market following a roadshow to be held in the May 16 week.

Proceeds will be used for an intercompany loan and to repay debt.

Also from Brazil, lender Banco Safra SA's $300 million 3½% notes due May 16, 2014 came to the market on Thursday at 99.862 to yield Treasuries plus 262.5 bps, a market source said.

The notes priced at the high end of talk, which was set at the Treasuries plus mid-200 bps area.

Barclays Capital, Banco Safra and UBS were the bookrunners for the Regulation S notes.

Roadshows set

Also from Latin America, Mexico-based electricity company CFE mandated Bank of America Merrill Lynch, Deutsche Bank and Goldman Sachs for a dollar-denominated issue of notes, a market source said.

The Rule 144A and Regulation S deal will be marketed during a roadshow held the week of May 16.

And Chile-based vehicle distributor Automotores Gildemeister is on a roadshow for its planned issue of 10-year senior notes via bookrunner JPMorgan, a market source said.

The marketing trip for the Rule 144A and Regulation S deal began May 10 and will conclude on May 16.

The notes are non-callable for five years and will include a change-of-control put at 101%.

Proceeds will be used to repay debt and for general corporate purposes.

Lonking, GCL-Poly pick leads

China-based construction machinery manufacturer Lonking Holdings has mandated Credit Suisse as the bookrunner for a dollar-denominated issue of five-year senior notes, a market source said.

The Rule 144A and Regulation S transaction will be marketed during a roadshow starting on or near May 18.

The notes will be non-callable for three years.

And China-based green energy supplier GCL-Poly Energy Holdings has picked RBS, Standard Chartered Bank, BOC International and BNP Paribas as bookrunners for a planned dollar-denominated issue of fixed-rate senior notes, a market source said.

The Rule 144A and Regulation S deal is expected to launch following a roadshow starting around May 18.

Proceeds will be used for capital expenditures, refinancing debt and general corporate purposes, according to a company filing.

Lebanon, Serbia ahead

In other deal-related news, Lebanon is planning a dollar-denominated issue of notes due 2019 and a tap of its 2022 6.1% notes, a market source said.

Byblos Bank, Fransa Investment and HSBC are the bookrunners for the Regulation S notes, which are expected to come to the market during the May 16 week.

The original issue of 2022 notes totaled $225 million and priced at par.

And Serbia plans to issue $1 billion in notes before the end of 2011, a market source said.

No other details were immediately available on Friday.

PGNiG plans deal

Also on Thursday, Poland-based natural gas company PGNiG announced plans to issue €500 million notes by October, a market source said.

BNP Paribas, Societe Generale and Unicredit are the bookrunners for the deal.

This follows the company's March announcement of a plan to offer bonds after the release of its second-quarter earnings.

Prior to that announcement, the company mandated BNP Paribas, Societe Generale and Unicredit for a euro-denominated bond offering. The offering, to total €1.2 billion, was announced in September and had been expected to price by the end of 2010.

Finansbank starts to perform

In trading, Turkey opened slightly firmer.

But traders weren't paying that much attention to the sovereign and instead were closely watching Turkey-based lender Finansbank and its recent issue of 5½% notes due 2016.

"They're finding a base, with broad-based demand seeing it jump," a London-based market source said.

The notes - which priced at 99.384 on May 5 via Citigroup, Deutsche Bank, HSBC and Standard Chartered - were seen in the morning at 95.60 bid, 96.10. Then the notes climbed to 96.40 bid, 96.60 offered on the news that the company's net income more than doubled in the first quarter.

"Finally, loose Finansbank papers are somewhat cleared and the bond has started to perform on the back of the profit announcement," he said. "However, we are closing the week with a moderate sell-off across the banks."

GTB in demand

The market was also watching the recent issue of notes from Nigeria's GTB Finance, which on May 12 sold $500 million 7½% senior notes due May 19, 2016 at 98.981 to yield 7¾%, or Treasuries plus 588 bps.

The notes were trading Friday morning at 98.75 bid, 99.75 offered and saw good buying. By the European afternoon, the notes were seen at 100.60 bid, 100.95 offered.

"It traded as high as 101.25 but couldn't hold on to those levels," a trader said.

Also from the continent, South Africa was quiet but firm, he said.

"Africa is generally well received, with the incredible Senegal 21s now at Libor plus 500 bps," a market source said.

Russian banks get support

Banks from Russia had a firm start to the day. "There's loads of street liquidity in Russian names," a market source said.

Said a trader: "Russian banks are well supported on the screens today. We are better buyers of Alfa Bank's 2021s."

The notes traded Friday at 101.625 bid, 102 offered after pricing April 19 at par.

"Alfa benefitted from general risk appetite for Russia."

"Even (Kazakhstan's) Kazkommertsbank JSC is supported in the street," a trader said, pointing to an issuer that had been an underperformer for most of the week.

The company's 8½% notes due 2018 traded Friday at 95.50 bid, 96.50 offered after trading down earlier in the week and pricing at 99.353 on May 5.

But Kazakhstan's BTA Bank didn't see a similar bounce.

"There's still not respite, and even some contagion," a source said. "But the rest of the sector is doing OK."

Said another market source: "BTA Bank is still going down. It continues its death spiral."

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