Strong demand for deals from India; Dominican Republic's Metro Country Club delays notes

By Christine Van Dusen

Atlanta, Aug. 16 - Emerging markets assets remained mostly stable on Thursday, even amid mixed economic data, and recent issues from banks in India attracted big dollars from investors.

"Signs of stabilization continue to emerge," according to a report from Barclays Capital. "United States industrial production was stronger than forecast and homebuilder sentiment improved to levels last reached in early 2007."

Assuming there are no market surprises in the coming weeks, the Federal Reserve's September meeting should yield no additional asset purchases, the report said.

"An undoing of market expectations on Fed easing has been reflected in higher US yields, but has yet to affect market volatility, which remains at low levels," Barclays said. "Similar signs of stabilization are appearing in EM as well. Malaysia's second-quarter growth surprised on the upside and Korea's labor market held up better than expected in July."

In deal-related news, Dominican Republic-based residential resort property developer Metro Country Club postponed a planned issue of $150 million seven-year notes, a market source said.

Bank of America Merrill Lynch was to be bookrunner for the Rule 144A and Regulation S deal.

The proceeds were to be used to refinance debt, complete developments, acquire land for future projects and fund transaction accounts.

This followed the Wednesday pricing of Mexican telecommunications company America Movil SAB de CV's CHF 250 million issue of 1 1/8% notes due Sept. 12, 2018. The notes came to the market at 99.942 to yield 1.135%, or mid-swaps plus 68 basis points, a market source said.

Credit Suisse was the bookrunner for the deal.

Market sources also were whispering on Thursday about a potential renminbi deal from Indonesia next month.

Qatar notes drop in trading

In trading, Qatar's 2042 notes remained in focus on Thursday as they fell to 123 and then 122.25 from Wednesday's level of 127, a trader said.

"So five points in about 20 hours on Qatar's 2042s," he said.

The sovereign's 2018 notes were trading Thursday at 99.90 bid, 100.10 offered, about 2 bps wider. And the 2023 notes were seen at 101.37 bid, 101.97 offered, wider by about 1 bp.

"The Street is taking paper down between 101.35 and 101.45," he said of the 2023 notes.

Good size for SECO

In other trading from the Middle East, Saudi Electric Co. (SECO) saw its 2022 paper at 107.50 bid, 108.50 offered after trading in good size on Wednesday at 108.50.

Bahrain's 2022 notes were trading early Thursday at 99.40 bid, par offered after Wednesday's high print of 100.25 and close of 99.50 bid, par offered.

Majid al Futtaim's 2017 notes - which traded Tuesday at 107 bid, 107.75 offered - were quoted Thursday at 106.50 bid, 107.50 offered. The issuer's 2019 notes followed Tuesday's levels of 101.87 bid, 102.37 offered with Thursday's 101.62 bid, 102.12 offered.

Access Bank trades up

From Africa, Nigeria-based Access Bank plc's recent notes due 2017 that priced at par were quoted at 101.75 bid, 102.50 offered on Thursday.

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

From South Africa, financial company Investec Ltd.'s 3 7/8% notes due 2017 were trading Thursday at 97 1/8 bid, 98 1/8 offered after Tuesday's level of 97 bid, 98 offered.

"Seeing a bit more nibbling on Investec," a trader said. "Retail investors have been adding."

The notes priced at 99.775 to yield Treasuries plus 310 bps on July 16 via HSBC, ING, Investec, RBS and Standard Chartered Bank in a Regulation S deal.

Russian bonds unchanged

Most bonds from Russia traded unchanged on Thursday morning, according to a report from UFS Investment Co.

This followed Wednesday's downward moves, with sovereign bonds declining about 0.4% on strong U.S. Treasury yields. Corporate bonds dropped as much as 0.3%.

"Russia 30s continued to decline and lost about 0.2% as US Treasury yields continued to rise," the report said. "We don't rule out that the Russian eurobond market will continue its moderate decline."

Poland sees better flows

Bonds from emerging Central and Eastern Europe continued to hold well as a result the stabilizing market environment, according to a report from Erste Group Research.

Better flows were reported for Poland's 2017 bonds.

"Hungarian euro bonds also traded well with better bid from international clients and local clients on the sell side," Erste Group said.

Croatia also has been seeing better trade volumes, and better prices.

The Croatian dollar 20s are yielding about 5.9%, and Croatia's dollar 2021s are at about 6%, the report said.

Union Bank of India oversubscribed

The final book for Union Bank of India's new $350 million issue of 4 5/8% note due 2017 was $2 billion, a market source said.

About 150 accounts were involved, with 78% from Asia, 18% from Europe and 4% from the offshore United States.

Funds accounted for 33%, banks 33%, private banks 30% and others 4%

The notes priced at 99.726 to yield 4.687%, or Treasuries plus 390 bps.

Barclays, Bank of America Merrill Lynch, Citigroup, Deutsche Bank, Standard Chartered Bank and HSBC were bookrunners on the deal.

Icici deal attracts orders

Also oversubscribed was the recent $750 million issue of 4.7% notes due in 5½ years from India's Icici Bank Ltd., which came to the market at 99.813 to yield Treasuries plus 400 bps.

Bank of America Merrill Lynch, Citigroup, HSBC, JPMorgan and Standard Chartered were bookrunners on the Regulation S and Rule 144A deal.

The final book was about $5.7 billion with about 312 accounts involved, a market source said.

About 46% of the orders came from Asia, 31% from the United States and 23% from Europe.

Asset and fund managers accounted for 58%, private banks 14%, banks 12%, insurers 10% and others 6%.

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