Emerging markets softer on Greece concerns; Argentina swap reoffer eyed; Abu Dhabi prices

By Christine Van Dusen

Atlanta, March 18 - Emerging markets were slightly softer Thursday after recent gains as investors' confidence in Greece's financial situation wavered, market sources said.

On Thursday Greek prime minister George Papandreou - who wants E.U. leaders to politically support the country's effort to get loans to boost confidence in its debt - said Greece doesn't want financial aid from the European Union or International Monetary Fund, even as Germany suggested it might support the IMF's participation in a bailout and France opposed it.

"This has motivated some in the market to take small amounts of profits and to desist from forcing the market higher," said Enrique Alvarez, debt strategist with think tank IDEAglobal.

Another big story on Thursday: Argentina's amended filing with the U.S. Securities and Exchange Commission, which would enable the sovereign to reopen a 2005 debt restructuring and potentially issue new bonds soon. The filing doesn't spell out any progress on a debt exchange but has market-watchers thinking a swap reoffer may be on the horizon.

"They've been the lead credit, in performance terms, today," Alvarez said. "They've reintroduced this shelf offering they had out in order to be able to float the bonds corresponding to the swap offering. I think that different statements put out by authorities might have captured the sense that we're on the threshold of seeing the swap reoffer come to fruition. That's boosted Argentina both locally and externally."

Argentina's spread on JPMorgan's Emerging Market Bond Index was 692 basis points on Thursday, down 13 bps. The index overall finished the day 1 bp tighter, and the return was down 0.15%.

Abu Dhabi demand strong

Also on Thursday, The National Bank of Abu Dhabi priced $750 million senior notes due 2015 at mid-swaps plus 178 bps, according to a market source. The issue, which was talked at mid-swaps plus 180 to 190 bps, "had strong demand," according to a trader based in Europe.

The day also saw Brazil's Magnesita Refratarios SA embarking on a roadshow through London, Boston, New York and wrapping up March 24 on the U.S. West Coast for a planned dollar-denominated issue of notes due 2020.

Two issuers plan notes

Additionally on Thursday, two issuers planned notes: Panama and RSHB Capital SA.

Banco Nacional de Panama is planning to sell $62.2 million 8 1/8% bonds due 2034 issued by the Republic of Panama. And Russia's OJSC Russian Agricultural Bank plans to sell a RUB 30 billion issue of 7½% notes due 2013 issued by RSHB Capital.

As of mid-day in Europe, the Russian deal was "not going very well," according to the European trader. "The yield is only 7½%, but they first said it would be 8½%."

Abu Dhabi prices bonds

The National Bank of Abu Dhabi priced $750 million senior notes (expected Aa3/A+/AA-) due March 25, 2015 at mid-swaps plus 178 bps, according to a market source.

Bank of America Merrill Lynch, Barclays Capital, HSBC and National Bank of Abu Dhabi were the bookrunners for the Regulation S-only deal.

The issue, which was talked at 180 to 190 bps over mid-swaps, includes a change-of-control put at par if the Abu Dhabi government ceases to own through ADI Council at least 50% of issued share capital.

Magnesita holds roadshow

Brazil's Magnesita Refratarios is holding a roadshow for a planned dollar-denominated issue of notes due 2020 (expected B1/BB-) via JPMorgan, BB Securities, Banco Bradesco BBI and Banco Itau, according to a market source.

The Rule 144A and Regulation S deal is non-callable for four years.

The roadshow began Thursday and will continue on Friday in London, on Monday in Boston, on Tuesday with a luncheon in New York and on Wednesday on the U.S. West Coast.

Magnesita Refratarios is a supplier of refractories for the steel and cement industries and is based in Contagem in the Brazilian state of Minas Gerais.

Panama plans notes

Banco Nacional de Panama plans to sell $62.2 million of 8 1/8% global bonds due April 28, 2034 issued by the Republic of Panama through Credit Suisse, according to a filing with the SEC.

The bonds were originally issued in the amount of $250 million on Jan. 28, 2004. A $250 million add-on priced on Aug. 11, 2005.

Those notes were repurchased and canceled in the amount of $327.2 million in a tender offer on Jan. 26, 2006.

Banco Nacional de Panama is selling the bonds in its role as trustee of the Fondo Fiduciario para el Desarrollo.

Credit Suisse will buy the bonds from Banco Nacional de Panama at market prices or negotiated prices and then sell them to the public on a variable-price reoffer basis from time to time.

Proceeds from the new issue will be used primarily for reinvestment in securities.

RSHB Capital plans notes

Russia's OJSC Russian Agricultural Bank plans to sell a RUB 30 billion issue of 7½% notes (expected Baa1//BBB) due March 25, 2013 issued by RSHB Capital, according to a market source.

BNP Paribas and Citi are the bookrunners for the Regulation S-only deal, which includes a change-of-control put if the state ceases to own or control at least 50% plus one share of OJSC Russian Agricultural Bank or no longer has the right to appoint and remove the majority of RAB's supervisory board.

RSHB is a special purpose vehicle for Moscow-based Russian Agricultural Bank.

Paul A. Harris contributed to this report

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