Market looks ahead to post-holiday deal flow; Renhe prints notes; issuers tap bookrunners

By Christine Van Dusen

Atlanta, Sept. 2 - "Live in the moment" may be a popular self-help platitude, but the phrase held little meaning for emerging market investors and issuers on Thursday, when all eyes and minds seemed trained on the gush of new deals expected after the Labor Day holiday.

"It's pretty dead today," a California-based buyside source said. "There's not much going on."

Still, Thursday did see one deal come to market - from China's Renhe Commercial Holdings Co. Ltd. - as sentiment improved on the news that weekly jobless claims finally dropped and pending sales of previously owned homes rose in the United States. Yields on 10-year Treasuries climbed as much as 6 basis points while 30-year yields jumped 9 bps before day's end.

Renhe prices notes

Renhe Commercial Holdings, an operator and developer of underground shopping centers, priced $300 million 13% notes due 2016 at par to yield 13%, according to an informed market source.

BOCI Asia Ltd., Bank of America Merrill Lynch and UBS were the bookrunners for the Rule 144A and Regulation S deal, which was talked at the 13% area.

Proceeds will be used to finance existing projects, to acquire and develop new projects and for general working capital.

"Renhe was in the market all last week," the New York-based source said. "That's about all we'll see pricing today. Friday will be a non-event. People will be in their seats in the morning, looking at employment numbers, and then they'll go home."

Many deals ahead

But after Labor Day, it will be "very active," he said. "People are bracing for supply. Everyone is looking at the new issue calendar."

Among the deals that are expected to come next week are Montenegro's offering of notes via Credit Suisse and Deutsche Bank, and Brazil-based telecommunications company Telemar Norte Leste's benchmark-sized 10-year notes with Bank of America Merrill Lynch, BNP Paribas, BTG Pactual and Itax.

Lithuania is also expected to bring a deal to market soon, as is Banco de Credito del Peru, which plans a dollar-denominated benchmark-sized issue of notes due 2020.

Market sources were also whispering Thursday about a possible peso-denominated issue of notes from Mexico-based media company Grupo Televisa SAB.

Volumes light

In the secondary market, it was "pretty quiet," the California-based buyside source said. "We're not seeing much. I think it's pretty dead."

Volumes were "light but stable. Secondary volumes will remain light until we hit next week," the New York-based market source said. "The equities bounce on Wednesday helped. Today is mostly positive."

At mid-afternoon the JPMorgan Emerging Markets Bond Index Plus spread was 283 bps, tighter by 5 bps. And the JPMorgan Emerging Markets Bond Index Global spread was 307 bps, tighter by 4 bps.

"Those aren't significant moves," the buyside source said.

The market won't likely see any real action until after Monday's Labor Day holiday, she said.

"I think that's when it's going to pick up. I think we'll see pretty good activity across the regions. It will be a bit of a free-for-all."

BNDES sets bookrunners

In other news on Thursday, Brazil-based state-owned development bank Banco Nacional de Desenvolvimento Economico e Social mandated BNP Paribas, Credit Suisse and Deutsche Bank for a roadshow in Europe starting Sept. 6, a market source said.

No other details were available.

And Korea Hydro & Nuclear Power Co., a unit of Seoul-based electric utility Korea Electric Power Corp., tapped Bank of America Merrill Lynch, Citigroup, Deutsche Bank, HSBC Holdings, Samsung Securities and UBS AG for an issue of dollar-denominated notes, a market source said.

The notes will be drawn down from the company's $2 billion global medium-term note program, according to Standard & Poor's.

A roadshow will be held from Sept. 6 to Sept. 8 in Hong Kong, Singapore, Los Angeles, London and New York.

Proceeds will be used for general corporate purposes and to fund a three-month bridge loan.

"The tenor hasn't been decided yet. They'll decide next week," a market source said. "Things are going to get busy, busy, busy."

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