Poland, Banco Votorantim, Metinvest price on calmer day for EM; State Bank of India on tap

By Christine Van Dusen

Atlanta, Feb. 7 - The sense of relative calm in Egypt led to a small rally in emerging markets assets on Monday and encouraged the Republic of Poland, Brazil's Banco Votorantim SA and Ukraine's Metinvest to print notes while several other issuers advanced deals.

Among the issuers to move forward with planned issues were State Bank of India, China's Delong Holdings Ltd., China's Country Garden Holdings Co. Ltd., Jamaica and Chile's Inversiones Alsacia SA.

"As well as the strong economic data last week, an apparent easing of tensions in Egypt helped sentiment," said Gavan Nolan, an analyst with Markit, in a report. "The sovereign's spreads rallied today as signs of normality - banks opening, traffic increasing - returned to the country. But the situation remains highly volatile, and there is still no clear idea of how the transition to a new government will work."

The JPMorgan Emerging Markets Bond Index Plus started the day 2 basis points tighter.

"The market is a lot calmer, in fact back in rally mode," a London-based market source said.

Egypt bonds trade up

Egypt's 2020 dollar notes - which were seen trading at 94.50 bid, 95.50 offered on Thursday - were at 97.5 bid, 98.50 offered on Monday.

"They're still performing," a London-based trader said. "Five-year credit default swaps for Egypt are grinding tighter."

Also seeing tighter spreads was Morocco, he said.

"There are better buyers in the street on all these names, with Morocco, Jordan and Egypt all being lifted," he said, noting "good levels."

Even Bahrain, considered one of the worst performers of the last week or so, was bouncing on Monday.

And the recent 8½% sukuk notes due 2016 that priced Jan. 26 at par from Dubai's Emaar Properties - which were seen trading Thursday at 98.50 - opened Monday at 98.62 bid, 99.12 offered.

The trader also noted better buyers for Bahrain-based lender BBK and Bahrain Mumtalakat Holding.

Tunisia will reimburse bonds

Tunisia, meanwhile, saw better sellers on Monday as the sovereign's central bank announced it would have no difficulty reimbursing the two bonds that mature this year and that further issuance may not be necessary.

"These bonds look OK from where I sit," the London trader said. "It's pretty much what most expected, but it's always nice to hear this from the central bank themselves."

This news helped contribute to the generally calm tone on Monday.

"After a multitude of market-moving events last week, today was placid in comparison," Nolan said. "Sovereigns underperformed the broader market after a disappointing outcome of Friday's E.U. summit."

As expected, the leaders didn't make an announcement about the strategy they intend to use to battle the sovereign debt crisis. "But investors were looking for more clarity, and at least an indication that the EU is making progress before the crucial meeting in March," Nolan said.

Poland, Metinvest sell notes

In the primary market on Monday, the Republic of Poland priced CHF 350 million 2¾% notes due Feb. 25, 2016 to yield 2.853%, or mid-swaps plus 130 bps, a market source said.

BNP Paribas and Credit Suisse were the bookrunners for the bonds, which were placed among investors from Switzerland.

In another new deal, Ukraine-based mining and steel business Metinvest priced $750 million 8¾% notes due Feb. 14, 2018 at 98.722 to yield 9%, or Treasuries plus 598.8 bps, a market source said.

The notes priced in line with guidance, which was set at 9% to 9½%.

Credit Suisse, Deutsche Bank, ING, RBS and VTB Capital were the bookrunners for the Rule 144A and Regulation S deal.

Proceeds will be used for general corporate purposes and capital expenditures.

"Metinvest is touch and go," the London-based market source said. "The book is said to be over $1 billion, so it should work."

LatAm issuers do deals

Also on Monday, Brazil-based lender Banco Votorantim priced $750 million 5¼% notes due Feb. 11, 2016 at 98.834 to yield 5.52%, or Treasuries plus 325 bps, a market source said.

The notes priced at the high end of talk, which was set at Treasuries plus the low 300 bps area.

"That looks generous," the London-based market source said.

BB Securities, BNP Paribas, Bradesco BBI, HSBC, RBS and Banco Votorantim were the bookrunners for the Rule 144A and Regulation deal.

Proceeds will be used for general corporate purposes.

This followed the Friday pricing of lender Banco Bilbao Vizcaya Argentaria Paraguay SA's $100 million notes due Feb. 11, 2016 at par to yield 9¾%, a market source said.

Citigroup and BBVA Securities were the bookrunners for the Rule 144A and Regulation S deal.

Bank of India talks notes

Monday also saw State Bank of India set price talk for its planned issue of CHF 250 million notes due Feb. 22, 2016 at the mid-swaps plus 185 bps area, a market source said.

Barclays Capital, Deutsche Bank, HSBC, RBS and Standard Chartered are the bookrunners for the Regulation S deal, which is expected to carry a coupon of 3 3/8%.

Pricing is due to occur on Tuesday.

Also taking steps toward the market was China-based property developer Country Garden Holdings, which mandated Goldman Sachs, JPMorgan and Deutsche Bank for a dollar-denominated issue of seven-year notes that will be marketed during a roadshow starting Wednesday, a market source said.

The Rule 144A and Regulation S notes are non-callable for four years.

Proceeds will be used for general corporate purposes and to fund existing and new property projects.

"The proposed bonds will improve Country Garden's liquidity, which will in turn help the company operate through the challenging bank credit conditions likely to be prevalent in China in 2011," said Peter Choy of Moody's Investors Service in a report.

And though the slight increase in the company's debt-to-capital ratio will position Country Garden Holdings less favorably than similarly rated peers, "Moody's expects Country Garden to continue exercising caution in the management of its debt and land acquisitions," Choy said.

Delong Holdings plans notes

In another planned deal from China, Beijing-based steel manufacturing and trading group Delong Holdings is expected to price this week its planned issue of up to $250 million of senior notes due 2016, a market source said.

The Rule 144A and Regulation S deal, via bookrunner Credit Suisse, was first announced in November. Proceeds will be used to refinance debt, for general corporate purposes and for strategic investments in the Chinese steel sector.

And from Latin America, Chile-based transportation company Inversiones Alsacia mandated Bank of America Merrill Lynch and JPMorgan for a roadshow that started Monday and will end Thursday, a market source said.

The marketing trip will travel from Los Angeles and Chile to New York, Lima, Boston and Bogota before wrapping up in London, New York and Miami.

Costa Rica, Jamaica eyed

In other news, Costa Rica is considering an international bond issue that could come to market in the first half of this year.

And Jamaica plans to issue dollar-denominated notes via BNP Paribas and Deutsche Bank, according to a government filing.

Proceeds from the Regulation S offering will be used to repay the sovereign's $400 million 11¾% notes due 2011.

The notes are expected to price this month.

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