CSN prices $750 million; EMBI Global tightens 20 bps; Votorantim to bring benchmark

By Paul A. Harris

St. Louis, Sept. 14 - Emerging markets bonds were quoted basically unchanged Monday, according to a New York trader who focuses on Asian fixed income, though the session saw another burst of primary activity.

Meanwhile the EMBI Global index tightened by 20 bps to end the day at 350 bps bid.

Equity futures were pointing to a much weaker open in New York, the trader recounted.

When that didn't materialize the market stabilized.

CSN tight to talk

Only one new deal priced in Monday's primary market.

Brazilian steel firm Companhia Siderurgica Nacional priced a $750 million issue of 10-year senior notes (Ba1/BB+/BBB-) at par to yield 6 7/8% on Monday.

The yield printed at the tight end of the final 7% area price talk. Initial guidance on the notes had been for a yield of 7% to 7¼%.

Morgan Stanley and Banco Itau were joint bookrunners.

Just before the terms surface the new notes were up 2 points in the gray market, according to an emerging markets mutual fund manager.

Votorantim plans benchmark

Brazilian industrial conglomerate Grupo Votorantim will commence marketing a benchmark-sized offering of dollar-denominated notes on Tuesday.

Citigroup, HSBC, Banco Itau and Banco Santander will lead the Rule 144A/Regulation S deal.

Roadshow presentations are set for Tuesday in London and New York, Wednesday in London and Boston, and Thursday in New York and on the U.S. West Coast.

Standard & Poor's assigns its BBB issuer rating to the Sao Paulo-based company. Fitch Ratings assigns its BBB- issuer rating to Votorantim.

Naftogaz promises 'robust' offer

Elsewhere on Monday NJSC Naftogaz of Ukraine announced that it will conduct negotiations with its bilateral creditors during this week, as part of its attempt to restructure of its eurobonds which mature on Sept. 30, just 15 days hence.

"NJSC Naftogaz is aware of the impending maturity of the eurobonds and remains focused on providing a clear and robust proposition to bondholders as soon as practicable," the company stated in a press release.

A trader saw the Naftogaz 8 1/8% notes in question at 84 bid, 86 offered, late in the London session.

On Friday a different London trader had the same paper at 83 bid, 86 offered.

The news may be weighing on Ukrainian sovereign debt.

The trader who spoke Monday marked Ukrainian government paper unchanged on the day, but 125 bps wider over the past week.

The Ukraine bonds maturing in 2017 were going out at a mid level of 76, the trader said.

The calendar builds

A couple of quasi-sovereign deals took places on the forward calendar, Monday.

Korea's National Agricultural Cooperative Federation (NACF) plans to price dollar-denominated senior fixed-rate notes (A2) following a full investor roadshow.

BNP Paribas, Deutsche Bank, HSBC and JP Morgan are leading the deal, which is being priced from the issuer's global medium-term notes program.

NACF is the Korean government's agricultural policy-making organization.

Meanwhile the Eurasian Development Bank plans to issue a benchmark amount of global bonds following an investor roadshow.

JP Morgan, Deutsche Bank and RBS Securities are leading the deal.

The Almaty, Kazakhstan-based bank provides financing to the Eurasian states.

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