Emerging markets pick up on Greece bailout prospects; Dominican Republic, Fibria price notes

By Christine Van Dusen

Atlanta, April 29 - Emerging markets perked up Thursday on the news that Greece might be closer to a financial aid package and the contagion effect might be contained, calming the previous day's panicky tone and improving trading for sovereigns that had appeared to be at risk, market sources said.

Germany agreed to push for a speedy bailout of the troubled sovereign, which then agreed to austerity measures that could help make the financial aid package from the European Union and the International Monetary Fund a reality.

As a result, five-year credit default swaps fell in Asia and other markets during European trading.

"Generally it's the bounce on the back of Greece hopes for a bailout plan," a London-based trader said. "Yesterday was weak, wider, panicky. Today is the opposite. Everything from yesterday is coming back in the hope of something better out of Greece."

The bounce-back included Turkey, Russia and Gazprom, he said. "Everything, really. Everything in the sell-off yesterday is back again."

All of this, and the fact that the stock markets were up at midday in Europe, was encouraging news to the trader. "We just need Greece to come through now."

A New York-based market source agreed. "Things feel better today," he said, noting the tone was "not great" but there was "some recovery from the sell-off from the last two days."

New issuance resumes

The primary side improved a bit too, with some new issues coming to market.

In a long-awaited deal, the Dominican Republic priced $750 million notes due 2021 at par to yield 7½%, or Treasuries plus 376.8 basis points.

And Brazil's Fibria Overseas Finance Ltd. priced $750 million 7½% notes due 2020 at 99.136 to yield 7 5/8%, or Treasuries plus 389 bps.

"The books were over 3.5 times oversubscribed," an informed market source said.

Other issuers moved forward with planned deals. As part of its debt-swap plan, Argentina announced it will offer $1 billion in global bonds due 2017, market sources said.

The new swap is expected to open Monday and offers another exchange opportunity to the holders of $20 billion in bonds who didn't participate in a 2005 swap. The swap is aiming for 60% participation, a goal that market sources say will likely be reached.

Two issuers set roadshows

Also moving ahead with a planned deal is Russia's Sberbank. The lender is planning to hold a roadshow for a benchmark-sized eurobond issue in May and could price the notes that month, the London trader said.

The Moscow-based lender's marketing trip could begin "in the next week or two," he said.

Other than that, Russian issuers were quiet on Thursday. "There's nothing that's imminent," he said. "But I'm sure they're coming."

In another marketing trip, Hong Kong's China Oriental Group Co. Ltd. will set out May 3 for a proposed dollar-denominated issue of senior notes via Deutsche Bank and ING.

Dominican Republic prices

The Dominican Republic priced $750 million 7½% notes due 2021 (B1/B/B) at par to yield Treasuries plus 376.8 bps, according to an informed market source.

Barclays Capital and Citigroup were the bookrunners for the Rule 144A and Regulation S deal, which was talked at 7¾%.

Fibria prices notes

Brazil's Fibria Overseas Finance priced $750 million 7½% notes due 2020 (expected ratings Ba1/BB/BB) at 99.136 to yield 7 5/8%, or Treasuries plus 389 bps, according to an informed market source.

Bank of America Merrill Lynch and Santander were the bookrunners for the Rule 144A and Regulation S deal, which was whispered at 7%.

Proceeds will be used for general corporate purposes.

Fibria is a Sao Paulo-based paper and pulp company.

Argentina plans bonds

Argentina will offer $1 billion in global bonds due 2017 as part of the sovereign's debt-swap plan, market sources said.

The new swap, which is expected to open Monday, offers a second exchange opportunity to the holders of $20 billion in bonds who didn't participate in a 2005 swap.

The bookrunners for the bond deal are Barclays Capital, Citigroup Global Markets and Deutsche Bank Securities.

China Oriental plans roadshow

Hong Kong's China Oriental Group is planning to hold a roadshow for a proposed issue of dollar-denominated senior notes beginning May 3 via Deutsche Bank and ING, according to a company filing.

Proceeds from the Rule 144A and Regulation S deal will be used to fund working capital, to fund capital expenditures and for general corporate purposes, including the possible acquisition of steel mills in China and investments in iron ore assets.

China Oriental Group is an integrated iron and steel manufacturer.

Sberbank sets May roadshow

Russia's Sberbank is looking to hold a roadshow for a benchmark-sized eurobond issue in May and could price the notes that month, a London-based trader said.

No other details on the deal were available Thursday.

Sberbank is a lender based in Moscow.

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