PTT E&P to bring $800 million; Fubon Bank announces notes; EMBI 10 bps tighter

By Paul A. Harris

St. Louis, Nov. 24 - The EMBI index was trading at a 244 basis points spread in the middle of the New York afternoon, 10 bps tighter on the session, according to a mutual fund manager.

To put that in perspective, the yield on the 10-year Treasury was 11 bps higher, the manager said.

"Emerging markets is shut down, and Treasuries are still trading," the buy-side source added.

Capital markets volumes appeared extremely thin ahead of the Thanksgiving holiday weekend in the United States, the manager said.

Although the S&P 500 stock index ended the session 1.5% higher, the buy-sider chalked that move up to thin volume, and reports that consumer spending rose for a fifth month while unemployment filings fell during the most recent week.

"The stock market was on a tear and the high-yield CDX is up ¼ point," the buy-sider said.

"It looks like a 'risk-on' kind of day.

"But the volumes are thin, so that can be misleading."

Watching the headlines

The primary market is expected to resume a purposeful pace in the week ahead, the buy-sider said.

The joker in the deck is Ireland, and the eurozone's continuing credit situation, as well as the social unrest that is being sparked by the zone's financial problems.

Ireland is putting the arm on the European Union and the International Monetary Fund to the tune of €85 billion, according to reports.

However suspicions loom that Ireland will eventually need considerably more.

"Thursday will likely be a more active day than today," the mutual fund manager said.

"That's because you have the situation in Ireland continuing to churn.

"Given that it's Thanksgiving in the U.S., strange things can happen in the currency markets on those low-volume days.

"That's the only thing open, and they are so illiquid that they tend to get pushed around."

Primary news

Wednesday's primary market news, meanwhile, emanated from Asia.

Thailand's PTT Exploration and Production plans to issue $800 million of notes.

The Bangkok-based petroleum exploration and production company will use the proceeds to fund part of its current investment plan.

Meanwhile, Hong Kong-based Fubon Bank announced in a Wednesday press release that it plans to sell $200 million of subordinated fixed-rate notes due in 2020.

Deutsche Bank Singapore Branch and UBS Hong Kong Branch are the bookrunners.

The notes will be sold under Fubon Bank's $1 billion euro medium-term note program.

And Hong Kong Electric postponed its planned sale of dollar-denominated 10-year bonds due to market conditions on Wednesday.

HSBC, Royal Bank of Scotland and Standard Chartered were leading the deal.

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