Oil credits higher as crude gains; Braskem sells $200 million perpetual bond

By Reshmi Basu and Paul A. Harris

New York, April 21- Emerging market debt saw a decent session Friday as oil credits such as Venezuela were buoyed by higher crude oil prices.

In the primary market, Braskem SA sold a $200 million offering of perpetual bonds (/BB//BB-) at par to yield 9%.

The deal priced at the wide end of price guidance, which was set at 8¾% to 9%.

JP Morgan was managing the Rule 144A/Regulation S sale.

And mobile phone provider Vimpel-Communications SA said it intends to sell $500 million in loan participation notes for the expansion of its network.

Additionally, the Moscow-based company is conducting an exchange offer to swap up to $250 million of its $450 million 10% loan participation notes due 2009 for new loan participation notes due 2016.

UBS SA is managing the exchange.

According to one market source, Russian telecoms tightened across the curve. The source added that the strong performance was ungrounded, suggesting that it was time for investors to take some profits.

In the secondary, Vimpelcom was no exception to the upward trend as its external debt scored gains. In trading, the 2009 notes were spotted at 108 bid, 108.50 offered, up 0.78 while its spread narrowed by 27 basis points to 219 basis points bid, 202 basis points ask versus Treasuries.

Oil producers up

An oil spike helped oil credits on Friday.

"There was a lot of action in 'Vene' because of oil," observed a trader

Crude broke its previous closing record to end at $75.17 per barrel on the back of Iran's nuclear ambitions and the ongoing conflict in Nigeria.

In response oil names such as Ecuador, Venezuela and Russia were higher. In late trading, the Ecuadorian bond due 2030 was seen at 101.75 bid, 102.25 offered, up 0.40. The Russian bond due 2030 was a tad higher at 108.625 bid, 108.875 offered. The Venezuelan bond due 2027 was spotted at 126 bid, 126.30 offered, up 0.15.

But despite higher commodity prices, emerging market debt saw an "okay" performance as volumes thinned out towards the afternoon, according to a second trader.

U.S. Treasury volatility helped curb investors' appetite for risk as the yield on the 10-year note remained above 5%, remarked a market source.

"Things got tired today [Friday]," noted the first trader.

"Treasuries bounced a lot. You saw a lot of cash bonds come back," he added.

Additionally, emerging markets saw local buying.

"I heard there was real money buying in Treasuries, which may have sparked some stuff," noted the first trader.

In afternoon trading, the Brazilian bond was quoted at 128.25 bid, 128.35 offered, up 0.30.

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