Emerging markets finish day weaker; CDS widen; Icici, First Gulf Bank, Promsvyazbank price

By Christine Van Dusen and Paul A. Harris

Atlanta, Nov. 20 - Emerging markets were fairly stable for most of Friday morning but finished the day a bit weaker as investors contended with an uptick in supply from several financial institutions, including a $750 million issue from India's Icici Bank, a $500 million issue from the United Arab Emirates' First Gulf Bank and a $200 million issue from Russia's Promsvyazbank, market sources said.

The day also saw El Salvador price $800 million of notes, which added to the supply of sovereign paper boosted earlier in the week by Qatar's pricing of a $7 billion three-tranche issue.

Friday morning, "it was stable and steady," a London-based trader said. "With equities crumbling late morning into lunchtime, we saw some selling and widening of credit default swaps."

Only Argentina's five-year credit default swaps closed tighter Friday, down 8.715 bps to end the day at 943.59 bps mid. Brazil closed at 125.16 bps mid, 5.515 bps wider, and Russia closed at 191.985 bps mid, 10.505 bps wider. Mexico also ended the day wider, with 145.145 bps mid, up 4.875 bps. And Venezuela closed at 1,096.145 bps mid, 11.585 bps wider.

Among corporates, OAO Gazprom finished Friday at 243.595 bps mid, 9.46 bps wider. And Russia's VTB Bank closed at 338.095 bps mid, 2.285 bps wider.

By the New York close, there was a sense of "investor indigestion, given the supply that's come," a market source said. "Generally the market felt kind of weak."

Investors are keeping an eye on Russia's AK Bars Bank, which plans to offer new 10¼% loan participation notes to investors for cash alongside an offer for its existing 8¼% loan participation notes. The new notes will mature in 2012 and be sold via subsidiary AK Bars Luxembourg SA, and they will have the same terms as the loan participation notes to be offered in exchange for the bank's existing $250 million of 8¼% loan participation notes due 2010.

"It looks like that will come next week," a market source said. "It's not a very well traded or heavy turnover issue."

Icici Bank prices $750 million notes

Icici Bank priced $750 million 5½% notes (Baa2/BBB-/) due March 25, 2015 at 99.826 to yield 5.54%, or Treasuries plus 337.5 bps, according to an informed market source.

Price talk was set at Treasuries plus 350 bps.

The bookrunners for the Rule 144A and Regulation S offering were Bank of America Merrill Lynch, Credit Suisse and HSBC.

"It was a $3.5 billion book," the source said. "It was a very broad and diverse investment base."

Proceeds will be used for general corporate purposes.

Icici is a commercial bank based in Mumbai, India.

First Gulf Bank taps primary

First Gulf Bank priced $500 million 4% notes due November 2012 at 99.748 to yield 250 bps over mid-swaps, according to a market source.

BNP Paribas, Citibank, Deutsche Bank and HSBC were the bookrunners for the deal. It priced on the low end of talk, which was 250 to 275 bps over mid-swaps.

The notes were trading at 99.90 at midday, according to a Europe-based trader, and later traded at 99.75.

"There's been a little bit of to-ing and fro-ing but not a huge change in price," a London-based source said.

First Gulf Bank is a financial institution based in Abu Dhabi, United Arab Emirates.

Promsvyazbank prices $200 million

Promsvyazbank priced $200 million 12¾% notes due May 2015 at par, according to a market source.

Citibank, HSBC and Promsvyazbank were the bookrunners.

Promsvyazbank is financial services company based in Moscow.

El Salvador raises $800 million

El Salvador (Ba1/BB/BB) priced $800 million 10-year notes to yield 7 3/8%, according to a market source.

Price talk was set at 7 5/8% to 7¾% following a roadshow that ended Nov. 19 on the U.S. West Coast.

Citigroup and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal.

Proceeds will be used for refinancing.

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