Emerging markets wake up; credit default swaps tighten; Hutchison Whampoa prices €1.75 billion

By Christine Van Dusen and Paul A. Harris

Atlanta, Nov. 10 - Emerging market activity picked up a touch Tuesday as spreads tightened, Hong Kong's Hutchison Whampoa Finance Ltd. priced €1.74 billion seven-year notes at swaps plus 165 bps and investors began to come to terms with the heavy load of issuance experienced during recent months, market sources said.

"Things have started to bounce," a New York-based trader said. "The market seems to have shaken off the froth."

Five-year credit default swaps were tighter across the board Tuesday at the European close, according to a market source. Argentina five-year CDS ended the day at 1,048.105 bps mid, 0.895 bps tighter. Brazil, at 124.63 bps mid, was 8.72 bps tighter for the day. Russia closed at 182.655 bps mid, 6.195 bps tighter. Mexico closed at 152.845 bps mid, 10.805 bps tighter, and Venezuela closed at 1,095.825 bps, 20.025 bps tighter.

Among corporate, OAO Gazprom five-year CDS were at 242.425 bps mid, 11.725 bps tighter. And Russia's VTB Bank, at 344.965 bps, was 2.785 bps tighter.

In the primary on Tuesday Columbus International, Inc. set price talk for its $450 million offering of five-year senior secured notes at 11% to 11½%, and three issuers launched notes: Commercial Bank of Qatar plans $1 billion of five-year senior unsecured notes and $600 million of 10-year subordinated notes, Poland's TVN Group plans a €400 million offering of senior notes due 2017, and Hong Kong's Oversea-Chinese Banking Corp. is planning a dollar-denominated issue of lower tier 2 subordinated notes due 2019.

Other than this "flurry of activity" and Hutchison's pricing, though, Tuesday was still somewhat quiet ahead of Veterans Day, according to a London-based trader at the European close.

"Volumes were below average," according to another European market source. "There could be some action Thursday, but we're expecting Wednesday and Friday to be dull."

Hutchison brings €1.75 billion

Hutchison Whampoa priced €1.75 billion of 4.75% seven-year senior unsecured notes (A3//expected A-) at 99.685 or mid-swaps plus 165 bps, according to a New York-based trader.

The bookrunners for the deal were Calyon, Deutsche Bank and HSBC.

"It was pretty much a drive-by - iit came and announced and priced," the trader said. "It's all done and dusted. We'd heard the book was massive, like $6 billion or $7 billion."

Proceeds will be used to refinance existing indebtedness.

Hutchison Whampoa Finance is a wholly owned financing subsidiary of Hutchison Whampoa Ltd., a Hong Kong-based infrastructure conglomerate.

Commercial Bank of Qatar launches $1.6 billion

Commercial Bank of Qatar on Tuesday launched a $1.6 billion two-part offering made up of $1 billion of five-year senior unsecured notes and $600 million of 10-year subordinated notes, according to a market source.

The bookrunners for the Rule 144A and Regulation S offering are Credit Suisse and Morgan Stanley.

Price guidance for the five-year tranche is mid-swaps plus 250 bps. For the 10-year tranche, guidance is set at mid-swaps plus 400 bps.

Pricing is expected this week.

"I think the deal is OK as long as they don't get greedy with the size or spread," a market source said. "The senior deal looks like a better value to me than the sub. The senior was in the gray market at plus-62 cents bid, which is not bad."

Commercial Bank of Qatar is a Doha, Qatar-based lender.

TVN plans €400 million

TVN Group is planning a €400 million offering of senior notes (provisional B1//) due 2017, according to the company.

JPMorgan and Nomura are underwriters for the notes, which will be guaranteed on a senior unsecured basis by parent TVN SA and some subsidiaries.

Proceeds will be used to redeem TVN's existing senior notes due 2013, to repay its senior credit facility and to increase liquidity.

TVN will also issue an additional €188 million of notes with the same terms as payment for the 49% stake in Neovision Holding BV that it does not already own.

TVN is a Warsaw, Poland-based media group.

Oversea-Chinese launches notes

Oversea-Chinese Banking Corp. on Tuesday announced plans for a dollar-denominated issue of lower tier 2 subordinated notes due 2019 (Aa2).

OCBC Bank, Credit Suisse (Singapore) Ltd., Goldman Sachs (Singapore) Pte. and Morgan Stanley Asia (Singapore) Pte. are the bookrunners for the proposed Regulation S issue.

The notes are callable in 2014, with a step-up in if the notes are not called.

Proceeds will be used for general corporate purposes, according to the Singapore-based retail and commercial banking company, but not for funding the proposed acquisition of ING Asia Private Bank Ltd., announced Oct. 15.

Columbus International sets talk

Columbus International set price talk for its $450 million offering of five-year senior secured notes (B2/B) at 11% to 11½% on Tuesday, according to a market source.

The roadshow wraps up on Nov. 12, and the Rule 144A for life bullet deal is expected to price after that.

Citigroup, Standard Bank and RBC Capital markets are joint bookrunners.

Proceeds will be used to fund a capital expenditure and to prepay operating company debt.

The prospective issuer is a Barbados-based undersea cable network services provider.

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