Slow day ahead of Thanksgiving; CDS mostly tighten among sovereigns; Agrokor could price Monday

By Christine Van Dusen and Paul A. Harris

Atlanta, Nov. 25 - Activity in emerging markets was very slow on Wednesday as investors thought more about Thanksgiving and looked ahead to the week after the holiday and on to year-end, market sources said.

Also on the minds of investors was the news that Dubai World, the state-run development company that runs Nakheel PJSC, was asking for a restructuring of its debt. Nakheel has a $3.52 billion bond maturing on Dec. 14, a New York-base source said.

"They are basically extending the maturities of upcoming bonds until May 30," the source said. "That's viewed as very negative, so it's trading poorly."

In the sovereign space, five-year credit default swaps mostly tightened on Wednesday, with Venezuela closing at 1,111.50 bps mid, 0.27 bps lower. Argentina closed at 927.75 bps mid, 15.535 bps tighter. And Russia also ended the day tighter, down 3.095 bps to finish at 189 bps mid.

Overall, the day was "deadly quiet," a New York-based investment banking source said. "I'm sure activity will pick up next week."

It won't be as big of a push and supply won't be as deep as during the better part of October, but "there will be transactions and some key credits coming to market between next week and the week of Dec. 7," another market source said. "Issuers are looking at markets and understanding that there is a lot of liquidity that is still being put to work in secondary market."

Agrokor possible for Monday

Possible issues that could come next week include Croatia-based consumer food products company Agrokor's €400 million offering of seven-year senior notes, which concludes its roadshow this week and could price as soon as Monday, and notes from Russia's AK Bars Bank. The financial services company, based in the Republic of Tatarstan, is offering new 10¼% loan participation notes for cash alongside an exchange offer for its existing 8¼ % loan participation notes.

Tatfondbank, a regional financial services company also based in the Republic of Tatarstan, could follow with its own deal.

And investors also are keeping an eye on First Ship Lease Trust, a Singapore-based shipping trust that provides alternative capital financing to the maritime industry, which could price $200 million senior notes due 2016 next week.

Busy 2010 expected

Come January, new issuance should return with gusto.

"Everyone will be trying to be one of the first issuers to come out of the gate that month," a market source said. "It will be pretty crowded in January, and a busy start to the year. Investors are out there and willing."

Agrokor updates timing on €400 million notes

Agrokor is expected to price its €400 million offering of seven-year senior notes (B2/B) on Monday, according to a market source.

The bookrunners for the Rule 144A and Regulation S deal are BNP Paribas and UniCredit.

The notes are non-callable for four years.

Proceeds will be used to repay debt.

Agrokor is a Zagreb, Croatia-based consumer food products company.

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