Emerging markets quiet after busy week; Greece, Goldman eyed; MHP prices; Russia struggles

By Christine Van Dusen

Atlanta, April 23 - After a busy week for new issuance, the primary market was muted in emerging markets on Friday as investors continued to focus on Greece's debt bailout talks and Goldman Sachs' legal difficulties, market sources said.

"It's a quiet Friday - thankfully," a New York-based market source said, grateful for a break from the busy pace seen earlier in the week.

"It's all about Greece," a London-based market source said. "There's really not much more than that."

The debt-saddled sovereign on Friday continued its meetings with E.U. and International Monetary Fund officials in an effort to hammer out a bailout plan.

"We're waiting to see how this goes," the London source said. "Let's see how the market reacts to the bailout deal."

He was also keeping an eye on Goldman Sachs, which has been sued for allegedly misrepresenting information about collateralized debt obligations connected to subprime mortgages. Britain also is looking at legal action while a German state bank has split from the investment bank.

"We need to see how the news comes out around Goldman," he said.

Primary side quiet

The primary side was nearly silent on Friday, other than MHP SA's pricing of a $330 million issue of 10¼% five-year fixed-rate notes at 101.452 to yield 9.88%.

"There are no new deals today, just the aftermath of yesterday," the London source said.

The new issue from Russia - a two-tranche eurobond deal totaling $5.5 billion, with $2 billion 3 5/8% notes due 2015 pricing at 99.475 to yield Treasuries 125 basis points and $3.5 billion 5% notes due 2020 at 99.363 to yield Treasuries plus 135 bps - was "struggling a bit," the London source said.

But there was a stronger showing for Egypt's new two-tranche deal totaling $1.5 billion, with $1 billion notes due 2020 to yield 5¾%, or Treasuries plus 199.7 bps, and $500 million notes due 2040 to yield 6.95%, or Treasuries plus 232.8 bps.

"Egypt is trading really well," the London source said.

Roadshows on tap

Next week will likely focus on new roadshows, particularly those from Morocco and Albania. Morocco is planning a benchmark-sized offering of euro-denominated global bonds via Barclays, HSBC and Natixis, according to a market source. And Albania is holding a roadshow for its first international bond issue, which could total €350 million, via JPMorgan and Deutsche Bank.

"It might be a bit more quiet next week because some deals are only roadshowing and pricing the following week," the London source said. "We'll see how that shakes out."

Egypt sells notes

Egypt priced a two-tranche deal totaling $1.5 billion (Ba1/BB+BB+), with $1 billion notes due April 29, 2020 to yield 5¾%, or Treasuries plus 199.7 bps, and $500 million notes due April 30, 2040 to yield 6.95%, or Treasuries plus 232.8 bps, according to a market source.

HSBC and Morgan Stanley were the bookrunners for the Rule 144A and Regulation S offering.

MHP prices notes

Ukraine food producer MHP priced a $330 million issue of 10¼% five-year fixed-rate notes (B3//B-) at 101.452 to yield 9.88% on Thursday, according to a market source.

Morgan Stanley and UBS Investment Bank were joint bookrunners for the Rule 144A and Regulation S issue.

The notes came in addition to the $240.572 million of 10¼% senior notes due 2015 issued in an exchange offer for $226.495 million of the company's existing 10¼% senior notes due 2011, the company announced in a press release.

The exchange offer will remain open for acceptance until May 10, 2010, unless extended.

The exchange will lengthen MHP's debt maturity profile and harmonize the terms of the notes it has outstanding, the company commented.

MHP intends to use the net proceeds from the newly issued notes to repay an estimated $100 million of short-term loan facilities provided by certain Ukrainian banks, with the balance of proceeds being used for general corporate purposes and to finance the expansion and diversification of its poultry and grain businesses.

In all, $90 million of this amount will be held in cash or cash equivalents but is expected to be used in due course for capital expenditures.

The newly issued notes and the exchange notes will be fully fungible.

Morocco sets roadshow

Morocco is holding a roadshow for a planned benchmark-sized offering of euro-denominated global bonds, according to a market source.

Barclays, HSBC and Natixis are the bookrunners for the deal, which could come to market as soon as the April 26 week.

Albania marketing bonds

Albania is holding a roadshow for a planned issue of euro-denominated bonds, according to a market source.

The international bond issue is the sovereign's first and could total about €350 million.

JPMorgan and Deutsche Bank are the bookrunners for the deal.

Paul A. Harris contributed to this report

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