Indian Oil sets roadshow start; Argentina CDS widen for third straight day

By Paul A. Harris

St. Louis, Jan. 8 - Emerging markets remained well-bid on Friday, according to a syndicate banker in New York.

"The market feels very good," the banker said.

"Investors have a lot of money to put to work."

Korean five-year CDS ended the European session at 77.3 bps mid, 2.9 bps tighter.

Ukraine five-year CDS were 942 bps mid, 30.5 bps tigher.

Indian Oil starts roadshow Monday

The primary market passed a moderately quiet Friday.

Indian Oil Corp. Ltd. announced that it will begin a roadshow on Monday in Singapore for a dollar-denominated Regulation S bond deal.

Deutsche Bank, HSBC and Standard Chartered Bank are leading the offer.

The roadshow continues Tuesday in Hong Kong, and Wednesday in London.

Pricing will follow the roadshow, subject to market conditions.

Moody's Investors Service assigns a Baa3 corporate credit rating to the New Delhi-based diversified energy company while Fitch has a BBB- corporate credit rating.

"It's Regulation S-only deal, which is a little unfortunate," a New York-based syndicate banker commented.

"Had they chosen to offer it via Rule 144A it would probably price at least 25 basis points tighter."

The company may have been attempting to save on fees by selling the dollar-denominated bonds primarily into Asian hands, because Indian Oil has a big following in Asia, the banker said, adding that the stinginess, with respect to fees, could end up costing the company more, in terms of interest expense.

"We'll likely see much more supply next week," the banker added, disclosing visibility on at least one sovereign deal in the week ahead.

Argentina widens for third straight day

Argentine five-year CDS widened for the third straight day, according to a U.S.-based market source, who had the CDS 25 bps to 50 bps wider on the Friday session.

The widening is taking place as Argentina's central bankers are arguing whether or not the country ought to tap $6.6 billion of reserves in order to pay debt coming due in 2010.

The latest news is that Argentina's president Cristina Fernandez de Kirchner fired central bank president Martin Redrado, which might clear the way for the government to tap those reserves, a market source said.

Venezuela and Russia

Another story bearing upon the high-yield Latin America sector concerns a possible collaboration between Venezuela and Russia, teaming to develop oil fields in Venezuela's Orinoco Belt, the market source said.

It could result in upwards of 450,000 barrels of oil per day of joint production between the two countries, the source added.

However Venezuela five-year CDS widened during the New York session, where they were seen finishing the day at 900 bps bid, 990 bps offered, 20 bps wider on the day.

Russia five-year CDS were headed out at 160 bps bid, 165 bps offered, unchanged on the day.

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