Poland, Braskem, Banrisul sell notes on stronger day for EM; spreads tighten; Urbi on tap

By Christine Van Dusen

Atlanta, Jan. 26 - Poland, Brazil's Braskem Finance Ltd., Brazil's Banco do Estado do Rio Grande do Sul (Banrisul) and Peru's Camposol SA printed notes on a stronger Thursday for emerging markets assets, which were buoyed by recent actions from the Federal Reserve and the European Central Bank.

"With the Federal Reserve last night signaling that they are keeping the liquidity tap running until at least 2014, and also reiterating that they are not out of ammunition, we saw asset prices in EM react to the U.S. Treasury move and the 'free cash for all' party," a trader said. "As suspected, the activity was where most dealers are probably short."

So investors were focused on Thursday on Abu Dhabi National Energy Co. (TAQA), International Petroleum Investment Co. and Qatar, he said.

"Dubai was well supported, however most of the action was in the former three names," he said. "It's been a 25 bps-tighter week for IPIC and about 10 to 15 bps tighter for TAQA. Both curves feel pretty well supported still, although most shorts must have thrown in the towel of late."

First Gulf Bank's 2017s were seen at 100.6875 bid, 100.9375 offered.

The Markit iTraxx SovX index spread was 10 bps tighter.

"With both the ECB and now the Fed going all in with the provision of free money, risk markets have responded as asked of them by hoovering up anything they can," a trader said. "The impact on prices depends on positioning, so spreads are anything from flat to 50 bps tighter."

Russia's 2028 notes were up 2 points while Qatar's 2042s were unchanged.

Poland prints bonds

In its new deal, Poland priced a $1 billion tap of its existing 5% notes due March 23, 2022 at 100.781 to yield 4.901%, or Treasuries plus 295 bps, a market source said.

The notes priced at the low end of talk, set at Treasuries plus 295 bps to 300 bps.

Citigroup, Deutsche Bank and HSBC were the bookrunners for the Securities and Exchange Commission-registered deal.

Proceeds will be used for budget borrowing requirements and for general financing purposes.

The original issue totaled $2 billion and priced on Nov. 3, 2011.

Banrisul, Braskem do deals

Brazil-based banking company Banrisul priced a $500 million issue of 7 3/8% notes due Feb. 2, 2022 at 99.131 to yield 7½%, a market source said.

The notes were talked in the 7 5/8% area.

Credit Suisse and Deutsche Bank were the bookrunners for the Rule 144A and Regulation S deal.

Proceeds will be used for general corporate purposes.

And Brazil-based petrochemical company Braskem priced a $250 million add-on to its 5¾% notes due 2021 at par to yield 5¾%, a market source said.

The notes priced at the tight end of talk, which was set at the 5.85% area.

Citigroup, Deutsche Bank and Santander were the bookrunners for the Rule 144A and Regulation S deal.

Proceeds will be used for refinancing and general corporate purposes.

The original issue totaled $750 million.

Camposol prices notes

Peru-based vegetable and fruit grower and exporter Camposol priced a $125 million issue of 9 7/8% notes due 2017 at a 10% yield, a market source said.

The notes were whispered at a yield in the low-10% area.

Credit Suisse and Santander were the bookrunners for the Rule 144A and Regulation S notes, which are non-callable for three years.

Proceeds will be used to pay long-term debt, to finance capital expenditures and for general corporate purposes.

Lithuania in demand

The new $1.5 billion issue of 6 5/8% notes due 2022 from Lithuania saw high demand, a trader said.

The deal priced at 99.102 to yield 6¾%, or Treasuries plus 480.3 bps, via Barclays Capital and BNP Paribas in a Rule 144A and Regulation S deal.

"The new Lithuania 10-year attracts a $5 billion book," a trader said. "The bond is 15 bps tighter, with room to easily go another 15 bps."

About 50% of the orders came from the United States, 30% from the United Kingdom, 14% from Europe and 6% from others.

Asset managers accounted for 67%, hedge funds 19% and banks 14%.

Peru deal oversubscribed

The Republic of Peru's recent $1.1 billion in taps of its 2050 and 2031 notes via Citigroup and Deutsche Bank were also oversubscribed.

The deal included $500 million 5 5/8% notes due 2050 that priced at 104.098 to yield 5.372%, or Treasuries plus 225 bps. The notes drew a total of $4.1 billion in orders.

The new deal also included a tap of the sovereign's existing 6.95% Peruvian nuevo soles notes due Nov. 18, 2031. The $600 million-equivalent notes priced at 100.956 to yield 6 7/8%. The final book was the equivalent of $3 billion.

Ukraine stands out

In trading on Thursday, solid performers included Ukraine, which was 15 bps to 20 bps tighter during the European morning.

"The market has been active all day, with decent interest across most names, although we are going out with a slightly weaker bias," a trader said. "On a spread basis, some of these bonds still look like an OK value; however, the cash price appreciation has brought out some paper on certain names, which will have to be digested if we are to move higher."

Looking to Kazakhstan, there was very little trading on Thursday as studies showed some improvement in loan growth and non-performing assets for the country's banks in December.

"In terms of market performance, the sector will continue to be largely dominated by the BTA Bank story and its potential second restructuring," a London-based analyst said.

Cabcorp, Cofide active

In deal-related news, Central American Bottling Corp. (Cabcorp), a Guatemala City-based producer and supplier of beverage products, is on a roadshow for a possible issue of Rule 144A and Regulation S dollar notes, a market source said.

Citigroup is the bookrunner for the marketing trip, which began Thursday and travels to London, Chile, Boston and Los Angeles before concluding on Feb. 1 in New York.

Also from Latin America, Peru-based development bank Corporacion Financiera de Desarollo (Cofide) mandated Deutsche Bank and JPMorgan for a roadshow that starts Friday, a market source said.

The marketing trip will start in Santiago, Chile, and travel to Los Angeles and London before wrapping up on Jan. 31 in New York and Boston.

In November, the company revived plans for a Rule 144A and Regulation S issue of $500 million 10-year notes.

Volcan launches notes

Also on Thursday, Peruvian mining company Volcan Compania Minera SA launched a $600 million issue of notes due 2022 to yield 5 3/8%, a market source said.

JPMorgan and Morgan Stanley are the bookrunners for the Rule 144A and Regulation S deal, which had been talked in the 5½% area.

Proceeds will be used for general corporate purposes.

Urbi whispers guidance

In other news from Latin America, Mexico-based homebuilder Urbi Desarollos Urbanos SAB de CV whispered its planned $300 million minimum issue of notes due 2022 at the low- to mid-10% area, a market source said.

Credit Suisse, Citigroup, Santander and BBVA are the bookrunners for the Rule 144A and Regulation S notes, which are non-callable for five years.

And Brazil-based energy company Petroleo Brasileiro SA (Petrobras) is planning an issue of $4 billion of bonds, a market source said.

No other details were immediately available on Thursday.

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