Emerging market deals muted amid holidays, economic data; Slovak Republic auctions notes

By Stephanie N. Rotondo

Portland, Ore., Aug. 16 - It was a quiet Monday in emerging markets, as there were "holidays in many of the countries out there," a market source said.

Still, there were some positive signs for the marketplace, including a rating boost for Russian banks and four-month borrowing cost lows for euro-denominated debt.

China - one of the largest foreign U.S. Treasury investors - also released its gross domestic product report, which showed it beating out Japan as the number two world economy.

But while the emerging market scene was muted, the source noted that investors were "eyeing the action on U.S. Treasuries."

According to recent data released by the Treasury Department, global demand for long-term U.S. financial securities improved to $44.4 billion in June, up from $35.3 billion in May. With a shaky U.S. and global economy, the U.S.-government issued instruments were seen as providing a safe bet for foreign investors.

The recent lows in interest rates, he said, are likely to help increase issuance abroad and, "as cash becomes available," there will be more investment opportunities.

Slovak Republic auctions notes

The Ministry of Finance of Slovak Republic announced it had auctioned €226.6 million of bonds due Feb. 24, 2016.

The issue was a reopening of a previous issue, and the bonds had a weighted average interest rate of 3.2452%.

The auction produced bids for more than the allotted amount, with requests for €334 million of the bonds coming.

The newly auctioned issue - which is expected to settle Aug. 18 - came as the Statistical Office of the Slovak Republic reported a 30.1% increase in industrial new order growth. That compared to a 41.8% incline in May year over year.

The country's central bank is forecasting economic growth of 3.7% in 2010 and 4.3% in 2011.

Market waits for Venezuela deal

A market source said investors were "awaiting allocations" of a new $3 billion dollar-denominated issue from the Republic of Venezuela.

The notes, which mature in 2022, were priced at par with a 12¾% coupon.

According to a Wall Street Journal report, demand for the debt was $9.2 billion.

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