Latin American debt stabilizes; Cable & Wireless deal sees substantial play among EM accounts

By Paul A. Harris

St. Louis, Feb. 9 - Latin American emerging markets debt stabilized during the U.S. trading session on Tuesday, according to a syndicate banker in New York.

Even Argentina, which the banker characterized as the "epicenter" of the recent widening, tightened during the New York day, the banker said.

Argentina's five-year credit-default swaps went out at 1,050 basis points mid, 20 bps tighter, after a big widening on Monday.

"The market sucked all week," the banker remarked.

Having said it, however, sovereign CDS spreads, which ended the European session flat, tightened modestly during the New York session.

Brazil's five-year CDS, which were 147.25 bps mid, unchanged, during the European afternoon, ended the New York session 5 bps tighter.

Mexico's five-year CDS, which were also unchanged at 151 bps mid in Europe, were 6 to 7 bps tighter at the end of the New York day.

Colombia's five-year CDS also finished 4 bps tighter, as trading wound down on the U.S. East Coast.

Meanwhile, Russia's five-year CDS were 213.125 bps mid, 5.375 bps wider during the European afternoon.

In the same time-frame Gazprom's five-year CDS were 301.50 bps mid, 3.625 bps wider.

Cable & Wireless raises $500 million

The primary market remained pretty quiet on Tuesday.

Sable International Finance Ltd. (Cable & Wireless plc) priced a $500 million issue of seven-year senior secured notes (Ba2/BB-/) at par to yield 7¾% on Tuesday.

The yield printed on top of the price talk.

Among the investors who played the issue, 30% to 40% were dedicated emerging markets accounts, according to a syndicate source.

No trading levels were available, as the notes will not be free to trade until 2:30 a.m. ET on Wednesday.

Barclays Capital, BNP Paribas, JPMorgan and RBS were the joint bookrunners.

Proceeds will be used to refinance debt and to provide liquidity.

The issuer is a Bracknell, England-based telecommunications services provider to British Virgin Islands, Cayman Islands, Panama, Macau, Maldives, Monaco, Seychelles, the Falkland Islands, St. Helena, Turks and Caicos Islands, Anguilla, Guernsey and Bermuda.

Deals in the market

There has been radio silence on Vanguarda do Brasil's $200 million offering of five-year senior notes (B3/B-/B-), which began a roadshow on Jan. 25, market sources say.

The Morgan Stanley-led offering, which will be used to help the Rio de Janeiro-based producer of soybeans and cotton refinance its short-term debt and reduce accounts payable, had been discussed in the context of an 11%-handle yield.

Meanwhile, news of a contentious new central bank president in Argentina and fears that recent dramatic widening of Argentine debt could imperil an expected debt exchange have placed a possible dollar-denominated bond deal from the City of Buenos Aires (B2/B-/B) on pause, according to an informed source.

A non-deal roadshow in Europe and the United States, led by Credit Suisse, ran from late January into the early days of the present month.

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