Emerging markets funds see inflows surge; Romania, Axtel, International Container price

By Christine Van Dusen

Atlanta, March 11 - Emerging markets bond funds saw net inflows of $1.05 billion for the week ended March 10, the biggest weekly inflow in 10 years, as economic conditions inspired investors to view the funds more positively, according to data tracker EPFR Global.

"There's enormous liquidity out there," said Cameron Brandt, global senior analyst for EPFR. "There's a lot of money going out there, looking for places to work. Commodities and exports both have had encouraging numbers recently, and that's sort of warmed people back to the asset class."

Solid commodities prices are "always a good thing for EM," said Enrique Alvarez, a debt strategist with think tank IDEAglobal. "Overall demand for EM credit continues to be good. We're seeing profit-taking across the board."

But at the same time, "when you look at it in another spectrum, the doubts are out there," he said. "Though they're decreased from the past week, they're still sustained."

JPMorgan's benchmark Emerging Markets Bond Index Plus was at 261 basis points Thursday, wider by 2 bps. "The return today is negative by 0.17%," Alvarez said. "It had been somewhat tighter in past days and is now losing a bit of ground."

For the most part, "we've been drifting more than anything else," he said.

Also on Thursday, Romania, Axtel SAB de CV and International Container Terminal Services Inc. brought deals to market.

Romania priced €1 billion 5% global bonds due 2015 at 99.25 to yield 5.174%, or mid-swaps plus 268 bps.

Axtel priced a $190 million add-on of 9% senior notes due 2019 at 102.5 to yield 8.609%.

And International Container Terminal Services priced its $250 million notes due 2020 at par to yield 7 3/8%, according to market sources.

The day also saw Turkey mandate bookrunners Bank of America Merrill Lynch, Barclays Capital and RBS for a dollar-denominated bond offering due 2021.

And Brazilian metals and mining company Vale SA planned a roadshow from March 15 to March 17 for an expected offering of euro-denominated bonds. The marketing trip will go to London, Germany and Switzerland before wrapping up on March 16 in Paris, London and the Netherlands.

Romania sells bonds

Romania priced €1 billion 5% global bonds due March 18, 2015 (Baa3/BB+/BB+) at 99.25 to yield 5.174%, or mid-swaps plus 268 bps, according to a market source.

Initial guidance for the Regulation S-only deal was in the mid-swaps plus the high 200 bps area.

Deutsche Bank, EFG Eurobank and HSBC were the bookrunners.

Mexico's Axtel prices

Mexico's Axtel priced a $190 million add-on of 9% senior notes (Ba3/BB-/BB) due Sept. 22, 2019 at 102.5 to yield 8.609%, according to market sources.

Credit Suisse and Bank of America Merrill Lynch are the bookrunners for the Rule 144A and Regulation S deal.

Axtel is a telecommunications company based in Monterrey, Mexico.

International Container prices

Philippines' International Container Terminal Services priced $250 million notes due 2020 at par to yield 7 3/8%, according to an informed market source.

SBC and JPMorgan were the bookrunners for the Regulation S-only deal.

Proceeds will be used to fund the company's investments in existing and new terminal construction activities, to refinance some existing debt and for other general corporate purposes.

International Container Terminal Services is based in Manila and develops, manages and operates container ports and terminals.

Turkey taps bookrunners

Turkey has mandated Bank of America Merrill Lynch, Barclays Capital and RBS for a dollar-denominated bond offering due 2021, according to a statement from the Republic of Turkey's Undersecretariat of Treasury.

The proceeds will be used for general financing purposes, which may include the repayment of debt, according to a filing with the Securities and Exchange Commission.

Vale on roadshow

Brazil's Vale will set out on a roadshow from March 15 to March 17 for a planned offering of euro-denominated global bonds, according to a market source.

BNP Paribas, Credit Agricole CIB, HSBC and Santander are the bookrunners for the issue, which includes a make-whole call.

The roadshow will begin March 15 in London, Germany and Switzerland and then continue on March 16 in Paris, London and the Netherlands. A global investor call will take place on March 17.

Proceeds will be used for general corporate purposes, including funding capital expenditures, managing liabilities and potentially making acquisitions, according to a company filing with the SEC.

Vale is a Rio de Janeiro-based metals and mining company.

Paul A. Harris contributed to this report

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