Emerging markets choppy as Latin America trades well; banks Alfa and Daycoval price notes

By Christine Van Dusen

Atlanta, March 10 - Emerging markets were a "mixed bag" Wednesday as Latin American trading looked fairly strong and several issuers moved forward with planned deals, market sources said.

"It's a mixed bag today," a New York-based source said. "It's just choppy. One second we're to the moon, the next second it looks like we're going down."

Calling trading of Brazil "very heavy," he speculated that the sovereign might be preparing for a new issue. "That's the way it's trading," he said. "But it also could be that we're moving toward a period of greater political risk, with elections a couple months away."

Mexico, too, was trading well on Wednesday. "A lot of people had it underweight, and now it's getting back to neutral with the U.S. recovery," he said.

In general, "the market's riding tighter on flows and lack of bad news and a lack of Greece negativity," according to a buyside source on the West Coast. "There's been some tightening over [the] last two or three days in particular. People are putting money to work."

That may be what Russia's Alfa MTN Issuance Ltd. is counting on, having priced on Wednesday its $600 million 8% senior unsecured notes due 2015 at par to yield Treasuries plus 567 basis points, another market source said.

By mid-afternoon in Europe, "it was up to 101.70, and many were buying, even at this high price," he said.

Also coming to market on Wednesday was Brazil-based Banco Daycoval SA's upsized $300 million 6½% notes due March 2015. That issue priced at 98.954 to yield 6¾%, or Treasuries plus 441.5 bps, another market source said.

Wednesday also saw initial price talk from Romania for its planned benchmark euro-denominated issue of global bonds due 2015. Early guidance stands at mid-swaps plus the high 200 bps area, according to a market source.

Overall, the day's activity was "neutral to positive," the New York source said. "There seems to be a reach for yield in general. But it's hard to get excited right now."

Russia's Alfa Bank prices

Russia's Alfa MTN Issuance (Alfa Bank) priced $600 million 8% senior unsecured notes (Ba1/B+/BB-) due March 18, 2015 at par to yield Treasuries plus 567 bps, according to an informed market source.

JPMorgan and UBS were the bookrunners for the Regulation S-only deal, which was talked at 8¼% to 8½%.

Alfa Bank is Russia's largest private lender.

Banco Daycoval prices

Brazil's Banco Daycoval priced $300 million 6½% senior unsecured notes (/BB/BB) due March 16, 2015 at 98.954 to yield 6¾%, or Treasuries plus 441.5 bps, a market source said.

After wrapping up a roadshow on Monday in London and New York, the issue was upsized from $150 million, another source said.

Banco Itau, Morgan Stanley and Santander were the bookrunners for the Regulation S-only offering, which was talked at 7%.

Banco Daycoval is a Sao Paulo-based banking company.

Romania gives initial price talk

Romania set initial price talk for its planned benchmark euro-denominated issue of global bonds (Ba3/BB+/BB+) due in 2015 at mid-swaps plus the high 200 bps area, according to a market source.

Deutsche Bank, EFG Eurobank and HSBC are the bookrunners for the Regulation S-only deal.

A roadshow wraps up Thursday in Zurich.

Paul A. Harris contributed to this report

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