Emerging markets edges tighter; sentiment better but watching Greece; new TNK-BP up in trading

By Cristal Cody and Paul A. Harris

St. Louis, Jan. 29 - Emerging markets was generally performing more strongly on Friday.

The EMBI Plus index was at a spread of 301 basis points heading into the New York afternoon, 3 bps tighter on the day, according to a mutual fund manager.

The market sentiment was a little better on Friday, the fund manager added.

Meanwhile emerging markets, and all other credit classes, continue to eye the fortunes of Greece, according to a buy-side source in the Midwest.

Greece CDS are now trading in the 400s bps, the buy-sider said.

"It tells you that although the world economy is probably recovering, the road to recovery is going to be a rocky one," the investor said.

In the European afternoon Brazil five-year CDS were quoted at 140 bps mid, 1.375 bps wider on the day and 4.5 bps wider on the week.

Russian five-year CDS were at 186.125 bps mid, 7 bps wider on the day, and 8 bps wider on the week.

China's five-year CDS were at 82 bps mid, 1.375 bps tighter on the day, and 2.875 bps tighter on the week.

TNK-BP higher in Europe

TNK-BP's new 6¼% notes due 2015 were seen near the European close Friday a "little higher on the price," a London-based trader said.

The five-year notes, which came to market on Wednesday at 99.157 to yield 6.45%, were quoted up 1/8 point Friday.

In addition, the 7¼% notes due 2020 "are up about ¼ point on the day" at 99½ bid, 99 5/8 offered, the trader said. The 10-year tranche priced at 98.263 to yield 7½%.

TNK-BP priced both parts in a $1 billion deal (Baa2/BBB-) on Wednesday.

Meanwhile on Friday, the Moscow-based energy giant's existing bonds firmed "5 to 10 bps tighter," the trader said.

The outstanding 7½% bonds due 2012 were quoted stronger at 103 3/8 bid, 103½ offered, while the 7¼% notes maturing in 2018 firmed to 104¼ bid, 104¾ offered.

Bank of Baroda to roadshow Monday

Meanwhile the calendar of upcoming deals - already showing a healthy schedule of planned offerings - picked up a new entry Friday.

India's Bank of Baroda will begin a roadshow on Monday for a benchmark-sized dollar-denominated offering of senior notes (//BBB-).

Citigroup, Deutsche Bank, HSBC and Standard Chartered are leading the deal.

Bank of Baroda is a full service banking company headquartered in Mumbai.

Baroda enters a deal pipeline that includes:

• Hyundai Card Corp.'s planned global bonds, via bookrunner Barclays Capital;

• Vanguardo do Brasi's $200 million five-year senior notes (B3/B-/B-), via Morgan Stanley;

• Banco Pine SA's dollar-denominated tier 2 seven-year fixed-rate notes (expected Ba3), via HSBC, Credit Suisse and Espirito Santo Investment;

• Copeinca ASA's dollar-denominated bonds, via Credit Suisse; and

• Star Energy Geothermal (Wayan Windu Ltd.)'s benchmark dollar-denominated five-year notes (B2), via Barclays Capital, Standard Chartered Bank and Nomura.

Meanwhile, non-deal roadshows are underway, or in the works from the City of Buenos Aires, via Credit Suisse, and The Republic of Lithuania, via Barclays Capital, HSBC Bank plc and Royal Bank of Scotland plc.

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