Chile's AES gives guidance; YPF on roadshow; Lithuania taps banks; spreads tighten

By Christine Van Dusen

Atlanta, Dec. 11 - Chile's AES Gener set price talk, Argentina's Yacimientos Petroliferos Fiscales (YPF) set out on roadshow and Lithuania mandated bookrunners on Wednesday as U.S. Treasuries opened flat amid a mixed reaction to the announced budget deal in the United States.

The Markit iTraxx SovX CEEME ex-EU index spread on Wednesday opened at 237 basis points over Treasuries, significantly tighter than Tuesday's 315 bps spread. The corporate index spread - seen Tuesday at 254 bps over Treasuries - moved in 2 bps on Wednesday.

Ukraine remained in the spotlight as police attempted to remove a protestor camp, a London-based analyst said.

"According to reports, the U.S. has also promised to remove import tariffs on Ukrainian goods if the country integrates with the European Union," she said.

In response, Ukraine sovereign bonds opened as much as a ½ point lower on Wednesday morning.

From the Middle East, bonds from Qatar performed well on Wednesday, bouncing on the news that it would not issue bonds in the international markets in 2014, a trader said.

"The window was there during the first quarter of this year for them and Abu Dhabi to issue, but those levels have gone," he said.

Qatar's 2040s were seen Wednesday at 114¾ bid, 115¾ offered, about 5 bps better.

"The belly remains solid, although the 2020s and 2022s are unchanged on the month now," he said. "The front end is a total rock, as are both the sukuks."

Bonds from Dubai and its corporates also stood out in trading during the session. Demand was noted for Dubai's Majid Al Futtaim Holding LLC (MAF), Emaar Properties, Dubai Holding and DPWorld.

"It's been a good week for Emaar's 2019s," a trader said. "It's at 109 bid, 109.40 offered now, a good 17 bps tighter on the week."

Dubai Holding's 2017s, meanwhile, were trading at 104½ after starting the year at 97 1/8.

Perpetuals 'steady'

In other trading on Wednesday, perpetual bonds from the Middle East were "steady," a trader said.

"But Dubai Islamic Bank and Emirates Islamic Bank are better offered than the other three," he said.

Also on Wednesday, two-way flows were spotted for Turkish banks.

Lat-Am issuers advance deals

Chilean electrical distributor AES Gener set talk in the 9% area for its upcoming $450 million issue of junior subordinated notes due in 2073, a market source said.

Citigroup Global Markets and Goldman Sachs & Co. are the bookrunners for the deal.

And Argentina-based petroleum and natural gas company YPF is on a roadshow for its upcoming issue of $300 million notes due in five years, a market source said.

Itau Unibanco and Morgan Stanley are the bookrunners for the deal.

Lithuania to issue notes

In other deal-related news, Lithuania has mandated Barclays and BNP Paribas as bookrunners for a new issue of bonds, a market source said.

No other details were immediately available on Wednesday.

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