New notes from Azerbaijan; Russia on holiday; flows light but two-way; Petrobras deal ahead

By Christine Van Dusen

Atlanta, March 10 - Azerbaijan sold notes during Monday's slower but balanced trading session for emerging markets assets.

"Russia is out on holiday today, so activity is somewhat limited today," a London-based analyst said. "Emerging markets remain highly divided in terms of performance. The overall complex continues to trade well, with global indices at their year-tights. Nonetheless, Russia remains under pressure and recent events have done little to calm nerves, with violence erupting in Ukraine between pro- and anti-Russian protestors and the possibility of economic sanctions against Russia become increasingly real."

South Africa, in particular, has benefitted from the flow of money out of Russia, she said. Central and emerging European sovereign bonds have profited too, moving tighter.

"Hungary now trades just 10 basis points wide of Russia in credit default swaps," she said. "That spread was closer to 100 bps at the start of the year."

Several other emerging markets bonds were in good shape on Monday, she said.

"Turkey cash is performing extremely well," she said.

Bonds from the Middle East saw light but balanced flows on Monday, a London-based trader said, with much of the focus remaining on Qatar after several Middle Eastern ambassadors announced they would leave the country.

"This toppled the balance of power from the longs to the shorts, so we are firmly in a slightly defensive market at present," he said.

Also on Monday, Brazil's Petroleo Brasileiro SA (Petrobras) set price talk for a six-tranche issue of dollar notes, China's Maoye International Holdings Ltd. sought issuance, China's Beijing Infrastructure Investment Co. Ltd. was on a roadshow, and China's Times Property Holdings Ltd. planned a deal.

Bahrain gets bids

Local bids returned for Bahrain bonds on Monday, the London trader said.

"There are still plenty of technical bonds out there," he said. "But you can see - from some of the levels that retail is printing at and getting done - that dealers are, in some cases, pretty punchy with their offers. Two weeks ago this was the opposite; retail was getting bids at very punchy levels."

In other news from the Gulf Region, market sources were whispering about a possible upcoming issue of notes from Saudi Electricity Co. Kenya may also gain regulatory approval this week for issuance.

"Nothing as yet official," a market source said.

And China's Airport Authority Hong Kong also is looking to issue notes, a market source said.

Azerbaijan prices notes

In its new deal, Azerbaijan priced $1.25 billion notes due in 2024 years at a yield of 5%, a syndicate source said.

The notes were talked at a spread in the low-to-mid-200 bps area.

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

No other details were immediately available on Monday.

Petrobras gives guidance

Brazil's Petrobras set price talk for a six-tranche issue of dollar notes due in three, six, 10 and 30 years, a market source said.

The dollar benchmark notes due 2017 were talked at a spread in the Treasuries plus 260 bps area. The bookrunners are Bank of China Hong Kong and HSBC.

The dollar benchmark floating-rate notes due 2017 were talked at a spread in the Libor plus 260 bps area. The bookrunners are Bank of China Hong Kong and JPMorgan.

The dollar benchmark notes due 2020 were talked in the Treasuries plus 340 bps area. BB Securities and HSBC are the bookrunners.

The dollar benchmark floating-rate notes due 2020 were talked at a spread in the Libor plus 298 bps area. Bradesco BBI and Citigroup are the bookrunners.

The dollar benchmark notes due 2024 were talked at a spread in the Treasuries plus 360 bps area. Bradesco BBI and Citigroup are the bookrunners.

And the dollar benchmark notes due 2044 were talked at a spread in the Treasuries plus 370 bps area and will be led by Bradesco BBI and Citigroup.

The proceeds from the Securities and Exchange Commission-registered deal will be used for capital expenditures.

The notes will be issued by Petrobras Global Finance and guaranteed by Petrobras, an energy company based in Rio de Janeiro.

Maoye sets roadshow

Maoye International Holdings announced it plans to conduct an international offering of renminbi-denominated notes and will begin a series of roadshow presentations to professional investors.

Citigroup Global Markets Ltd. and Deutsche Bank AG, Singapore Branch will act as joint lead managers and joint bookrunners for the proposed Regulation S deal.

Proceeds will be used primarily to refinance existing debt and for general corporate purposes.

Maoye is a department store based in Shenzhen, China.

Roadshow for Beijing corporate

China's Beijing Infrastructure Investment set out on a roadshow on Monday to market a dollar-denominated issue of notes, a market source said.

RBS, Wing Lung Bank are the global coordinators. RBS, Wing Lung Bank, ICBC (Asia) and ICBC International are the joint lead managers and joint bookrunners for the Regulation S deal.

The roadshow will take place in Hong Kong, Singapore and London.

Times Property seeks issuance

China's Times Property Holdings is looking to issue dollar-denominated notes due in five years, a market source said.

BOC International, Citigroup, Haitong International, HSBC and UBS are the bookrunners for the Regulation S deal.

The proceeds will be used to refinance existing debt, to fund property development projects and for general corporate purposes.

The notes are expected to price this week.

Times Property is based in Guangzhou.

Marisa Wong contributed to this article.

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