Uruguay prices $500 million; Naftogaz firms on Ukraine finance ministry guarantees

By Paul A. Harris

St. Louis, Sept. 21 - The EMBI-Plus index closed the day one bp tighter at 316 bps bid, according to a market source.

Meanwhile in the primary market Uruguay did a drive-by $500 million 16-year deal, which came at a 16 bps concession to existing paper, according to the calculations of Enrique Alvarez, global head of Latin American research for IDEAglobal.

Uruguay matches talk

República Oriental del Uruguay (Ba3/BB/BB-) priced a $500 million issue of 6 7/8% senior notes at par on Monday.

The deal was launched earlier in the day at 6 7/8%.

Barclays Capital and Citigroup ran the books.

IDEAglobal strategist Alvarez expressed the belief that Uruguay got a good deal.

Pointing out that Uruguay is not a highly liquid credit, Alvaraz gave spots on its 8% bonds due November 2022 at 6.65% mid, 6.72% bid, and reckoned that the new 2025 bonds - three years longer in maturity - came at a 16 bps concession to the 2022 paper.

Although Uruguay has high-yield ratings, it does not fit into the same class of credits as those typically considered as high-beta Latin American sovereigns - Ecuador, Argentina and Venezuela, Alvarez said.

EDB price talk

Elsewhere Eurasian Development Bank (A3/BBB/BBB) set price talk for its benchmark offering of five-year senior unsecured global bonds at the 7¾% area on Monday.

The deal could price as early as Tuesday, a market source said.

Deutsche Bank, JPMorgan and RBS Securities Inc. are leading the deal Rule 144A and Regulation S deal.

The Almaty, Kazakhstan-based bank provides financing to the Eurasian states.

Naftogaz improves

Earlier in the day, as the European session wound down, a trader in London saw the emerging markets weaker, as both oil prices and stock prices were lower on the day, there.

The broad market was a couple of basis points wider, the trader reckoned.

However Russia's benchmark 7½% global bonds due 2030 were 2 bps tighter at the close of the European session at 229 bps bid.

News that Ukraine's finance ministry intends to unconditionally guarantee the debt of NJSC Naftogaz caused its 8 1/8% notes due Sept. 30, 2009 to firm to 88 bid, 90 offered, the source said.

Last week the bonds were seen as low as 84 bid, 87 offered, according to a market source.

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