Indonesia sells $2 billion; Votorantim does $750 million; 'frozen account' news hits Argentina

By Cristal Cody and Paul A. Harris

St. Louis, Jan. 12 - Emerging markets were weaker with U.S. stocks on Tuesday, according to an asset manager based on the West Coast.

The underperformer was Argentina, on news that a judge in the United States froze an account which Argentina's central bank holds with the U.S. Federal Reserve Bank.

Argentina's central bank and the country's executive branch have been arguing over the use of central bank reserves to bring Argentina out of default with respect to its global debt.

In the ongoing dispute, Argentina's president Cristina Fernandez recently attempted to fire central bank president Martin Redrado - a move that was thwarted last week by an Argentinean federal judge.

As a result, Argentina's bond prices fell, the West Coast asset manager said.

The peso-denominated discount bonds were at 67½ bid, heading into the late afternoon in the United States - down 3 points during the session.

Indonesia prices $2 billion

In the primary market, the Republic of Indonesia priced $2 billion of 5 7/8% 10-year global bonds (Ba2/BB-/BB) at 99.044 to yield 6%, on Tuesday.

The yield printed on top of the price talk.

Barclays Capital, Citigroup and Credit Suisse were the bookrunners for the Rule 144A/Regulation S deal.

U.S. accounts, which made up 50% of the order book, drove the deal, according to an informed source, who added that the $2 billion issue played to $4.5 billion of demand.

The yield might have been pushed lower, however investors planted their feet at the 6% threshold in light of some sell-off seen in recent tightly priced issues, the source added.

Indonesia elected not to go forward with a contemplated 30-year tranche, the source added, noting that the decision to abandon the 30-year piece was made strictly on the part of the issuer.

Some pullback

Looking at the Asian sector, a trader based in Europe said Tuesday: "We've had a very strong start to the year.

"A lot of money is coming into the market, though now we're getting some pullback."

The Asian sector on Tuesday was seen as "slightly consolidated today given the move in equities and all the supply pipelines starting to build on investment grade."

Votorantim prices $750 million

Elsewhere in the primary market, Brazil's Banco Votorantim SA priced a $750 million issue of 10-year notes (Baa2) at par to yield 7 3/8%.

Banco Itau, Bank of America Merrill Lynch, BB Securities and Deutsche Bank were joint bookrunners.

Proceeds will be used for general corporate purposes.

Urbi sets price talk

Mexico's Desarrollos Urbanos, SAB de CV unveiled price talk for its $250 million offering of 10-year senior guaranteed notes (Ba3//BB) at the 10% area on Tuesday.

The deal is expected to price on Wednesday.

Deutsche Bank Securities and Santander are joint bookrunners for the Rule 144A and Regulation S offering.

The notes will come with five years of call protection.

Proceeds will be used to repay debt.

Banco do Brasil to bring benchmark

Banco do Brasil SA plans to make a benchmark-sized dollar-denominated placement of senior unsecured notes that will mature in 2015 and in 2020, this week, according to a market source.

The Sao Paulo-based bank mandated Deutsche Bank, JP Morgan, BB Securities and Banco Votorantim as joint bookrunners for the Rule 144A and Regulation S bond offering.

Proceeds will be used for general corporate purposes.

Colbun marketing $400 million

Chilean electricity producer Colbun SA is marketing a $400 million offering of 10-year senior unsecured notes (/BBB-/BBB), according to a market source.

The deal is expected to price this week.

Citigroup and JP Morgan are joint bookrunners.

Proceeds will be used to refinance debt and fund capital expenditures.

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