Emerging markets stronger on Greece progress; Poland, Independencia price; others on tap

By Christine Van Dusen

Atlanta, March 23 - Emerging markets were stronger Tuesday as investors felt some optimism about plans for fixing Greece's financial problems and as Dubai World prepared to present its debt restructuring plan, market sources said.

"It's all generally stronger," a London-based trader said. "It's generally been pretty quiet, and the tone is stronger today across the board."

In the secondary market, strong movers included "all the high-quality Russian names: Gazprom, VTB," he said. "All the sort of quasi-sovereign stuff is better today."

That improvement could possibly be credited to progress on Greece's financial problems. After initially being at odds over whether the International Monetary Fund should bail out the troubled sovereign, Germany and France are now teaming up to push for such an aid package. More progress is expected on March 25 and March 26 during a summit of E.U. leaders.

Also casting good light on the day's activity was the fact that Dubai World will on Wednesday present its plan for restructuring $26 billion in debt - a sign of positive momentum on a financial issue that initially made investors fearful and roiled markets, sources said.

Spreads are "tightening somewhat," an emerging markets strategist said.

"It just generally seems to be stronger across the board," the trader said. "I'm not sure whether that's about Greece or Dubai, but we're expecting better news in general."

Issuers should be gearing up to bring deals to market in the next 30 days, an emerging markets strategist said. "That's going to be the theme as issuers try to take advantage of new rates," he said. "That's part of a trend we're seeing out there."

And investors have the cash to take on the upcoming increase in supply, he said.

"There seems to be additional cash looking for yield," he said. "We are seeing customers and investors either trying to extend the curve or trying to go higher up in the credit risk spectrum."

Primary sees activity

Tuesday saw some new bond offerings come to the market.

Poland priced its €1.25 billion 3¾% notes due 2017, a source said.

And Mexico's Financiera Independencia SAB de CV priced $200 million 10% senior notes due 2015 at par, according to the company and an informed market source.

For the Independencia deal, "the books were over 2.5 times oversubscribed," the source said.

Also on Tuesday, a market source said Russia's RZD Capital Ltd. will, "in the coming weeks," hold a roadshow for a planned benchmark-sized dollar-denominated offering of seven-year bonds.

And Saudi Arabia's Banque Saudi Fransi is planning a dollar-denominated benchmark-sized offering of bonds, according to the London-based trader. The issuer has met with investors in Europe, Asia and the United Arab Emirates.

"We hope to start trading it soon," the source said.

Poland prices euro deal

Poland priced €1.25 billion 3¾% notes due 2017 to yield 3.852%, or mid-swaps plus 100 basis points, according to a market source.

Barclays Capital, Citigroup and HSBC were the bookrunners for the deal, which came in line with price guidance of 100 bps over mid-swaps.

Financiera Independencia prices

Mexico's Financiera Independencia priced $200 million 10% senior notes (/BB-/BB-) due March 30, 2015 at par, according to a company press release and an informed market source.

Proceeds will be used primarily for general corporate purposes.

This is "the first international debt offering by a microfinance institution in Latin America," said Noel Gonzalez, chief executive officer, in a statement.

Bank of America Merrill Lynch and Morgan Stanley were the bookrunners for the Rule 144A and Regulation S deal, which was talked at 10% to 10¼%.

Financiera Independencia is a microfinance lender based in Pena Blanca Santa Fe, Mexico.

RZD Capital eyes roadshow

Russia's RZD Capital is planning to hold a roadshow for its benchmark-sized dollar-denominated offering of bonds due 2017, according to a market source.

The marketing trip will take place "in the coming weeks," the source said.

The bookrunners for the deal are Barclays, JPMorgan and VTB Capital.

RZD Capital is a state-owned railway company based in Moscow.

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