Vietnam preps $1 billion; Banco do Brasil, Colbun trade higher; funds see $480 million inflow

By Paul A. Harris

St. Louis, Jan. 15 - Emerging markets passed a quiet Friday in New York, with U.S. players heading into a three-day holiday weekend, a syndicate banker said.

However emerging markets debt widened somewhat on the day, the banker specified.

At the European close, Brazil five-year CDS were nearly 4 bps wider over the course of that session, at 124.5 bps mid, according to a market source.

Russia five-year CDS were 3 bps wider at 167 bps mid.

Mexico five-year CDS were 2 bps wider at 129 bps mid.

However there was tightening seen in some high-beta sovereign debt.

Venezuela five-year CDS ended the European session at 855 bps mid, 20 bps tighter.

Argentina CDS were 40 bps tighter at 1,048 bps mid.

$480 million inflow

For the 18th consecutive week, the cash flows for dedicated emerging markets bond funds remained positive.

The funds saw $480.3 million of inflows, according to data tracking service EPFR Global.

That compares to the previous week's $10.5 million of inflows.

The average weekly inflows are about $156 million, rendering the latest week on the high side and stronger than the average over the last 12 months, EPFR said.

The week ahead

The Friday session in the United States saw a slight build-up of the calendar.

The Government of the Socialist Republic of Vietnam (Ba3/BB) will begin a roadshow for its $1 billion offering of 10-year global bonds during the week ahead.

Barclays Capital, Citigroup and Deutsche Bank have the mandate to lead the offering.

Elsewhere Indonesia's Listrindo Capital BV and PT Cikarang Listrindo will begin a U.S. roadshow on Tuesday for their benchmark offering of five-year senior unsecured notes (Ba2).

The deal is expected to price on Friday.

Credit Suisse and Barclays Capital are joint bookrunners.

Proceeds will be used to repay bank debt, as well as to fund the company's capacity expansion program and for general corporate purposes.

Colbun, Banco do Brasil trade higher

Two deals which priced on Thursday traded higher on Friday, according to Europe-based traders.

Chilean electricity producer Colbun SA's new 6% notes due in 2020, which priced at 98.973, in a $500 million issue, were up 2 points, a Switzerland-based trader said.

Meanwhile Banco do Brasil's new 4½% notes due 2015 and its new 6% notes due 2020 rose in trading, the trader said, spotting both up roughly a point.

"The market has stabilized a little bit, but it was very strong the last two or three days," said the trader.

"It's taking a little bit of a rest at the moment, but it's still quite positive."

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