Investors continue to digest heavy supply; Agile prices, Bumi soon; Columbus begins roadshow

By Christine Van Dusen and Paul A. Harris

Atlanta, Nov. 4 - Emerging markets remained "very firm" in trading Wednesday as investors continued to sort through the heavy supply of paper and await information on further pricings, market sources said.

"There are a couple of deals in the works," a source said, "but aside from that the market's very firm."

Investors are staying cautious and keeping an eye on all the new issuance of the last several weeks, according to a New York-based investment banking source.

"It's more of the same," the source said. "People are busy with the new issuance market."

Five-year credit default swaps were wider across corporates and sovereigns at Wednesday's European close.

OAO Gazprom five-year CDS ended the session at 258.2 bps mid, 6.37 wider. And Russia's VTB Bank closed at 350.91 bps, 6.255 bps wider.

Among the sovereigns, Argentina's five-year CDS closed at 1051.975 bps mid, 23.095 bps wider. Brazil closed at 141.1 bps, 7.475 bps wider. Mexico closed at 169.915 bps, 7.58 bps wider. Russia closed at 198.4 bps, 7.67 bps wider, and Venezuela closed at 1112.875 bps, 79.62 bps wider.

"There's been good buying in with sovereign cash today," a New York-based market source said. "The market is pretty firm, generally."

Most investors are keeping an eye on deals in the works, like Hong Kong-based land developer Agile Property Holdings Ltd.'s senior unsecured notes (Ba3//), which on Wednesday priced at a size of $300 million to yield 10½%.

Also on radar screens: a benchmark-sized offering of dollar-denominated seven-year notes (Ba3/BB) from Indonesian electrical utility PT Bumi Resources Tbk.

Bumi could price as soon as Thursday. "They were trying to get 10%, but I'm not sure if they will," the source said.

Also generating interest in the market, according to the source, is Indonesia's PLN, which on Oct. 30 priced its $1.25 billion of 7¾% notes due 2019 at 99.152 to yield 7 7/8%. PLN is a Jakarta-based state-owned electricity utility and a subsidiary of PT Perusahaan Listrik Negara. "That's had a lot of buying interest."

Columbus roadshows amid Jamaica's troubles

Meanwhile, Jamaica's financial situation loomed over outstanding bonds in the Caribbean.

The country continued talks with the International Monetary Fund about a $1.2 billion standby loan accord designed to help Jamaica address a downturn in foreign exchange earnings and revenue caused by the global financial crisis.

On Monday Standard & Poor's downgraded Jamaica to CCC after the resignation of the country's central bank governor, who was the lead negotiator with the IMF.

But this didn't stop Barbados-based Columbus International, Inc. from setting out on a roadshow to run from Nov. 5 to Nov. 12 for its $450 million offering of five-year senior secured notes (B2/B), according to a market source.

The company may hold investments in retail broadband providers based in Jamaica, but the fact that Columbus is in the telecom sector and has reach into the Bahamas, Trinidad and other nations means there's a "different dynamic" at play, according to a New York-based investment banking source.

So its upcoming deal may not be as affected by the IMF mission.

Additionally, the source said, "I think the devalued Jamaican dollar is a benefit. We're not starting from a very high point, and that's not a bad thing."

The Rule 144A for life bullet deal is expected to price soon after the roadshow ends.

Citigroup, Standard Bank and RBC Capital markets are joint bookrunners.

Proceeds will be used to fund a capital expenditure and prepay operating company debt.

The issuer is an undersea cable network services provider.

Vale prices $1 billion

In other primary news Wednesday, Vale Overseas Ltd. priced $1 billion of 6.875% notes (Baa3/BBB+/BBB) due Nov. 10, 2039 at 98.564 or Treasuries plus 265 bps to yield 6.99%, according to a company news release and filings.

The yield match whispers of the 7% area.

Deutsche Bank, HSBC and JP Morgan were the bookrunners for the Securities and Exchange Commission-registered deal.

Proceeds will be used for general corporate purposes.

Vale Overseas is part of Vale SA, formerly Companhia Vale do Rio Doce, a mining company based in Rio de Janeiro, Brazil.

Agile matches talk

Agile Property priced its $300 million issue of 10% seven-year notes (Ba3) at 97.562 to yield 10½% on Thursday, according to a market source.

The yield was printed atop the price talk.

But an informed source said noted: "The original whisper or talk I heard was 10%."

Bank of America Merrill Lynch and HSBC are the bookrunners for the Rule 144A and Regulation S deal.

Proceeds will be used to finance existing and new property projects.

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