Alam Sutera plans roadshow this week; Russian Federation in the wings with dollar deal

By Aleesia Forni and Paul A. Harris

Columbus, Ohio, March 13 - Emerging markets prices pushed higher on Tuesday as buyers chased a market that is thinly offered, according to a market source.

The Itraxx CEEMEA SOVX index of credit default swaps from Central and Eastern Europe, the Middle East and Africa, was 5 basis points tighter during the London session at 260 bps bid, 262 bps offered.

In the primary market Alam Sutera International Private Ltd. is preparing for a roadshow this week.

And the Russian Federation is heard to be in the wings with a benchmark dollar-denominated deal.

Alam Sutera starts Wednesday

Coming up this week, Alam Sutera International will begin a roadshow on Wednesday for a dollar-denominated offering of five-year senior notes (B2/B), according to a market source.

Morgan Stanley and UBS will be the joint bookrunners for the Rule 144A and Regulation S transaction.

The notes have a make-whole call for the first three years and after that are callable at a premium. There is also a three-year 35% equity clawback and a 101% poison put.

About 80% of the proceeds will be used for the acquisition of a landbank in Greater Jakarta, primarily in Alam Sutera and Pasar Kemis and their surrounding areas, and about 20% will be used for the construction and development of the company's properties.

Alam Sutera is a wholly owned subsidiary of Tangerang, Indonesia-based real estate developer PT Alam Sutera Realty Tbk.

Russia offering expected soon

With its presidential election in the books, Russia (Baa1/BBB/BBB) is believed to be headed to the debt capital markets very soon, sources say.

A deal could materialize before the end of the week.

Russia has issuing capacity of $7 billion but is expected to show up with a deal sized substantially smaller.

The syndicate remains to be announced. However look for Citigroup, Deutsche Bank, BNP, VTB and Sberbank to be involved, the source advised.

Russia's last pass at the dollar-denominated market came nearly two years ago, in April 2010, when it priced $5.5 billion in two tranches.

Russia's 3 5/8% notes due 2015 were trading at mid-swaps plus 158 bps bid on Tuesday, 70 bps tighter since the beginning of the year. The 5% notes due 2020 were at mid-swaps plus 215 bps bid, 38 bps tighter on the year.

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