Lat-Am outperforms; buyers outnumber sellers; Banglalink sets talk; Paranapanema cancels deal

By Christine Van Dusen

Atlanta, April 17 - Emerging markets bonds ended the holiday-shortened week with a bit of a whimper on Thursday, with a significant slow-down of activity as traders packed up early for the Good Friday and Easter holidays.

Still, Latin American debt managed to outperform on Thursday, with low-beta cash bonds unchanged or up 50 cents, even as the Treasury market weakened, a New York-based trader said.

Venezuela and PDVSA were particular standouts during the session, while Argentina saw very little action, he said.

Overall, buyers outnumbered sellers amid limited activity, he said.

"Latin American debt still seems like the place that investors feel comfortable adding risk and spending cash, with spread pick-up and positive momentum causing the chase of bonds and higher and higher prices and tighter and tighter spreads," he said.

Meanwhile, amid continued tension in Russia and Ukraine, bonds from the latter sovereign have seen some buying while corporates have seen few bids, said Svitlana Rusakova of Dragon Capital.

"'Rally' might be too strong a word for the sovereign," she said. "Corporates and quasi-sovereigns suffered another move lower."

On Thursday, leaders from the United States, Russia, Ukraine and the European Union met in Geneva and called for an end to the violence in Ukraine.

Against this backdrop, Bangladesh's Banglalink Digital Communications Ltd. gave initial guidance in the 9% area for its upcoming $300 million issue of five-year notes, a market source said.

Citigroup is the sole bookrunner for the Rule 144A and Regulation S deal.

Paranapanema postpones

Brazil-based copper producer Paranapanema SA has postponed its planned issue of dollar-denominated notes due in five years, following talk in the high-8% area, a market source said.

BB Securities, Bradesco BBI and Deutsche Bank were the bookrunners for the Rule 144A and Regulation S deal.

No other details were immediately available on Thursday.

State Grid sets roadshow

State Grid Corp. of China will set out on April 21 for a roadshow to market a dollar-denominated issue of notes, a market source said.

HSBC, Goldman Sachs (Asia), Morgan Stanley, BOC International, ICBC International, JPMorgan, Citigroup, Deutsche Bank, UBS, ANZ and RBS are the bookrunners for the Rule 144A and Regulation S deal.

The roadshow will be held in Asia and the United States.

Marketing trip for Masisa

Chile-based wood products company Masisa SA will set out on Monday for a roadshow with Deutsche Bank, Itau BBA, JPMorgan and Scotiabank, a market source said.

The roadshow will begin in Los Angeles and travel to London, New York, Geneva and Zurich before concluding on April 24 in Boston and New York.

A Rule 144A and Regulation S issue of notes may follow.

OCP in demand

Morocco-based Office Cherifien de Phosphate's (OCP) two-part issue of $1.55 billion notes due 2024 and 2044 attracted $4.75 billion in orders, a market source said.

The $1.25 billion 5 5/8% notes due 2024 that priced at 99.059 to yield Treasuries plus 311.1 basis points drew $3.5 billion in orders, with 56% from the United States, 16% from Europe, 15% from the United Kingdom, 11% from the Middle East and North Africa and 2% from others.

The deal also included $300 million 6 7/8% notes due 2044 that priced at 93.992 to yield Treasuries plus 392.7 bps. The tranche drew $1.25 billion in orders, with 81% from the United States, 11% from the United Kingdom, 7% from Europe and 1% from others.

Barclays, JPMorgan and Morgan Stanley were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to fund the company's expenditure program and for general corporate purposes.

Romania deal oversubscribed

Romania's new €1.25 billion issue of 3 5/8% notes due 2024 attracted a final book of more than €3.5 billion from more than 260 investors, a market source said.

The notes priced this week at 99.374 to yield 3.701%, or mid-swaps plus 200 bps, with Citigroup, ING, Societe Generale and UniCredit in a Regulation S deal.

About 26% of the orders came from the offshore United States, 18% from Central and emerging Europe, 14% from Germany and Austria, 13% from the United Kingdom, 11% from Romania, 11% from Western Europe, 4% from the Netherlands and 3% from Asia and the Middle East.

Fund managers picked up 61%, banks and private banks 20%, insurers and pension funds 17% and others 2%.

MIE shows final book

Also attracting orders was China-based MIE Holdings Corp.'s new $500 million issue of 7½% notes due 2019, which priced at 98.98 to yield 7¾%, a market source said.

The final book was $2.7 billion from 230 investors, with 44% from Asia, 37% from the United States and 19% from Europe.

Asset managers accounted for 74% of the orders, insurers and pension funds 14%, banks 7% and private banks 5%.

Deutsche Bank, BofA Merrill Lynch, HSBC, JPMorgan, Morgan Stanley and UBS were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to redeem the company's 2016 notes and fund related redemption costs, as well as for capital expenditures, working capital and general corporate purposes.

ICBC draws orders

The final book for Industrial and Commercial Bank of China Ltd.'s two-tranche issue of RMB 2.5 billion notes due 2016 and 2019 was a combined RMB 5.7 billion, a market source said.

The RMB 2 billion 3.2% notes due in 2016 that priced at par drew RMB 3.9 billion from 80 accounts, with 46% from Hong Kong and Taiwan, 26% from Singapore and 28% from other emerging markets countries.

Banks took up 51%, asset and fund managers 35%, private banks 13% and corporates and others 1%.

The RMB 500 billion 3.9% notes due 2019 that priced at par collected RMB 1.8 billion from 50 accounts, with 85% from Hong Kong and Taiwan and 15% from Singapore.

Insurers accounted for 43%, asset and fund managers 28%, banks 25% and private banks 4%.

ICBC Asia, ICBC International, ICBC Singapore branch, HSBC, Citigroup and Credit Suisse were the bookrunners for the Regulation S deal.

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