Emerging markets bond funds see $1.43 billion inflows; Russia sets roadshow schedule

By Aleesia Forni

Columbus, Ohio, March 15 - Emerging markets are continuing to adjust to the U.S. Treasury move, as the yield on the 10-year bond rose to 2.35% by the end of London's session on Thursday, a trader said.

Intense demand for bonds flattened as emerging markets bond funds saw $1.43 billion of inflows for the week, compared to $1.4 billion last week, according to a market source.

This figure brings year-to-date inflows to $3.27 billion, according to a Prospect News analysis of the data.

The primary market did see some new paper on Thursday, as Alrosa Finance SA and Banco BMG SA priced deals, while Russia will begin a roadshow for its possible bond offering in the week ahead.

Alrosa, Banco BMG price deals

Alrosa Finance priced $1.04 billion of senior unsecured notes (Ba3/BB-/BB-) in two tranches, according to a market source.

The deal included a $725 million tranche of nine-month notes, which priced at 96.945 to yield 4 1/8%. Additionally, the company priced $315 million of 12-month notes at 95.88 to yield 4¼%.

Alrosa Finance is a subsidiary of Moscow-based Alrosa Co. Ltd., a company engaged in the exploration and extraction of diamond reserves.

The primary market saw another bank bring a deal on Thursday, as Brazil's Banco BMG priced a $150 million 9 5/8% five-year senior unsecured bullet (Ba3) at 99.509 to yield 9¾%, according to a market source.

Barclays and BCP Bank were the bookrunners for the deal.

The Belo Horizonte, Brazil-based bank provides financing and investment services.

Russia sets roadshow

The roadshow schedule for Russia's (Baa1/BBB/BBB) expected benchmark dollar-denominated offering of sovereign bonds has been set for the week ahead, according to a market source.

Meetings are scheduled to get underway in San Francisco on March 18, Los Angeles on March 20, Boston from March 21 to March 22, New York on March 23 and London on March 26 and March 27.

BNP Paribas, Citigroup, Deutsche Bank, Troika Dialog and VTB Capital will arrange the meetings.

A London-based trader "strongly doubts" Russia will price the proposed deal before the completion of these roadshows.

Transportadora de Gas on tap

Also in the primary, Transportadora de Gas Internacional SA ESP (Baa3/BB/BB+) launched a $750 million offering of 10-year notes at 5.7%, according to a market source.

Earlier price talk was set at 5 7/8%.

Citigroup and Credit Suisse will manage the Bucaramanga, Colombia-based natural gas company's deal.

Proceeds will be used to fund the company's current tender offers on its notes maturing in 2017.

Doha Bank trading below highs

In the secondary market, Doha Bank's 3½% bonds were trading "fairly well" on Thursday, according to a market source.

The notes saw European retail demand at 99.45 bid near the end of London's session, still less than its high point of 99.60.

The Qatar-based lender priced $300 million of the notes at 98.964 on March 9.

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