Latin American space active; Banco Santander, Banco ABC plan notes; Buenos Aires sets talk

By Christine Van Dusen

Atlanta, March 29 - Activity among Latin American corporates picked up slightly on Monday while most sovereigns in the region slowed in advance of an anticipated break for the Easter holiday, market sources said.

"This week's activity is going to be front-loaded because people are going to be checking out on Thursday or Friday in anticipation of the holiday weekend with Easter," a New York-based market source said. "So to the extent that anyone has deals to do, they're going to wrap up early in the week. Then I think next week things will be busy again, once we get back from Easter."

On the corporate side, two Sao Paulo-based banks made plans for dollar-denominated issues that are expected to price this week.

Banco Santander Brasil SA is expected to issue five-year notes via Deutsche Bank, JPMorgan and Santander. And Banco ABC Brasil SA, which is on a roadshow until Tuesday, is planning an issue of notes due 2020 that is being talked at the 8¼% area, market sources said.

Another Latin American issuer, the city of Buenos Aires, also plans to do a dollar-denominated benchmark offering of notes. That deal, due 2015, is being talked at 12½% to 13%, a source said.

"So it's relatively busy," the New York source said.

Sovereigns quiet

The pace was not so busy for Latin American sovereigns, however. The region is still focusing on risk and some residual pressure stemming from Greece's bailout plan, which includes loans from European countries and funds from the International Monetary Fund, said Enrique Alvarez, debt strategist with IDEAglobal.

"There's also the issue of U.S. Treasury yields, which popped up last week and have sort of served to cap advances in Latin America," he said.

Investors are still focusing on Argentina, which got the go-ahead last week to move forward with an exchange for $20 billion in debt. The 2005 debt restructuring, expected to take place in about two weeks, could allow the sovereign to issue new bonds for the first time since defaulting in 2001 on $95 billion in debt.

But on Monday, there wasn't a lot of price movement, Alvarez said. "It rose before but isn't doing much today," he said. "It's just a light week."

Venezuela, too, hasn't moved much. That's due in part to controversy over the recent arrest of a critic of president Hugo Chavez. Guillermo Zuloago, who owns an independent television network, was arrested Thursday and then released while his case is investigated.

"That has taken some of the oil-related strength out of Venezuela," Alvarez said.

The JPMorgan Emerging Markets Bond Index moved only a tiny bit on Monday, finishing at 509.46. "The return today is minus 0.03%," Alvarez said. "That's basically unmoved. The spreads are 247 [bps], which is 2 [bps] tighter."

Santander Brasil plans notes

Banco Santander Brasil is planning a benchmark-sized, dollar-denominated issue of five-year notes (expected Baa2/BBB-/BBB) that could price as soon as the middle of the week, informed market sources said.

Deutsche Bank, JPMorgan and Santander are the bookrunners for the Rule 144A and Regulation S offering.

Proceeds will be used for general corporate purposes.

Banco ABC on roadshow

Banco ABC Brasil is holding a roadshow for a dollar-denominated issue of notes due April 2020 (expected Ba1) via HSBC, Banco Itau and Santander, a market source said.

The marketing trip will end Tuesday for the Rule 144A and Regulation S deal, which is being talked at the 8¼% area and is expected to price this week.

Proceeds will be used for increasing the bank's capital base for portfolio growth.

Buenos Aires plans benchmark deal

The city of Buenos Aires is planning a benchmark-sized issue of dollar-denominated notes due 2015 (B2/B-), according to a market source.

The Rule 144A and Regulation S offering via Credit Suisse could price as soon as Tuesday morning.

The deal is being talked to yield 12½% to 13%.

Proceeds will be used to fund infrastructure investments, projects in the city's hospitals, road developments, urban hygiene programs, education and expansion of the subway system.

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