Philippines, Stats ChipPAC, Bancolombia sell notes; volume improves; Cemex trades higher

By Christine Van Dusen

Atlanta, Jan. 5 - Emerging market deal flow resumed on Wednesday with new bond issuance from the Philippines, Singapore's Stats ChipPAC Ltd. and Bancolombia SA. Meanwhile, several other issuers - including West China Cement Ltd. and China SCE Property Holdings Ltd. - planned deals amid healthier volumes, improving risk appetite and solid economic news from the United States.

Treasury yields got a boost and overall market sentiment improved on the back of December payrolls numbers that showed a jump of 297,000.

"Things are definitely opening up," a London-based market source said.

Spreads continued to tighten, this time by about 8 basis points on the JPMorgan Emerging Markets Bond Index Plus.

And volumes began to climb back, a Connecticut-based trader said. "Monday was slow, primarily because London was out. Yesterday was busier, but it was a bit lopsided with mandate money finding a home.

"Today flows have been more balanced. There's much more participation today. We're now starting to see signs of the new supply coming," he said. "Once the faucet gets open, it might prove to be pretty heavy in terms of new deals."

Stats ChipPAC prints notes

The $200 million notes due March 31, 2016 that priced Wednesday from Singapore-based semiconductor packaging design, assembly and distribution company Stats ChipPAC came to market at par to yield 5 3/8%, a source said.

Deutsche Bank was the bookrunner for the Rule 144A and Regulation S deal.

Proceeds will be used to help prepay in full the remaining $234.5 million outstanding under the company's $360 million senior term loan facility obtained in May 2010, according to a company announcement.

The deal was initially talked at the 5 5/8% area and then was revised to 5 3/8% to 5½%, a market source said.

"That closed quickly. It sounds like it's a little on the tight side, but I guess people really like it," the London-based market source said. "Semiconductors are still cyclical, and it's still relatively early in the uptrend."

Philippines, Bancolombia price

Wednesday also saw the Republic of the Philippines price its PHP 54.77 billion bonds due Jan. 14, 2036 at par to yield 6¼%, according to a government filing.

Citigroup, HSBC, Credit Suisse, Deutsche Bank, JPMorgan and UBS were the bookrunners for the Securities and Exchange Commission-registered deal.

The notes are payable in dollars.

Proceeds will be used for general budgetary purposes.

"That will do very well," the trader said.

In another new deal, Medellin, Colombia-based lender Bancolombia priced $520 million 4¼% notes due Jan. 12, 2016 at 99.156 to yield Treasuries plus 230 bps, a market source said.

JPMorgan was the bookrunner for the Rule 144A and Regulation S transaction.

"We've seen some interest in that," a trader said. "It should do very well."

Chinese issuers advance deals

From Asia, Xi'an, China-based cement producer West China Cement mandated Deutsche Bank as the bookrunner for a possible issue of dollar-denominated notes, a market source said.

And residential real estate developer China SCE Property Holdings is on a roadshow for up to $1.5 billion of notes via Deutsche Bank and HSBC, a market source said.

Proceeds from the Rule 144A and Regulation S deal will be used for general corporate purposes and to finance new and existing projects.

Cemex in demand

In other news on Wednesday, the recent new issue from Mexico's Cemex - $1 billion 9% notes due 2018 that priced Tuesday at 99.364 to yield 9 1/8% - was trading fairly well.

"I've seen it up at 100.9 bid, 101 offered," the London-based source said. "It's done fine."

A trader said he had been fearful the deal would come in too tight. "But it didn't," he said. "There's been plenty of demand for the deal. We've seen a pretty consistent stream of buyers since it broke yesterday. We've seen it trade as high as 1011/4. For a billion-dollar issue it's done very, very well. So there are definitely guys with fresh money to put to work as 2011 begins."

Overall, though, Wednesday wasn't a big buying day, he said.

"We're not seeing feverish buying, more of guys looking for cheap assets and moving some stuff around and a little more balance in terms of buyers and sellers, probably due in part to them getting ready for new deals," he said.

Banco do Brasil on roadshow

Brazil-based lender Banco do Brasil is on a roadshow this week for a possible issue of notes via Banco Votorantim, BB Securities, BNP Paribas and Deutsche Bank, a market source said.

"They have not yet said what they want to do," a market source said.

And Turkey mandated Barclays Capital, Deutsche Bank and JPMorgan for a dollar-denominated issue of notes due 2041, according to a 424B5 filing with the Securities and Exchange Commission.

Proceeds from the SEC-registered deal will be used for general financing purposes, which may include the repayment of debt.

Issuers mull deals

Market sources were whispering on Wednesday about a possible deal from Chile-based retail company Cencosud SA, which had been expected to price up to $900 million of bonds before the end of 2010. JPMorgan, Deutsche Bank and Santander were the bookrunners for that deal.

There's also talk that perpetual issuer Venezuela could sell as much as $7 billion of bonds. And outside Latin America, Slovenia is also said to be mulling a possible issue of notes, after delaying a plan for up to €4 billion in issuance in 2010.

"There's also talk about a possible issue from Dubai World in the middle of the month," the Connecticut trader said. "That's a big change for them, after their big restructuring. There are still some worries there and conditions look cheaper. But people feel more comfortable."

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