Emerging market primary silent as recent deals trade up; Ecuador bonds begin to stabilize

By Andrea Heisinger

New York, Oct. 1 - No reported new deals priced in the emerging markets on Friday, but a couple of upcoming deals were announced.

IXE Banco SA of Mexico is planning to sell between $100 million and $120 million of notes in the coming week. It's a re-launch of a deal from February that was pulled due to market conditions.

Another longer-term deal is planned by Argentina's Edenor SA. The electricity producer is selling a minimum of $150 million 9¾% notes due 2022 as part of concurrent exchange and tender offers. The sale is not expected until mid-October.

Terms were given for a deal priced late Thursday by Banco Estado Chile. The financial services company sold $500 million of 10-year notes under Rule 144A.

Trading was light for the day, a source said, with no new deals coming into the market and only a few from the previous day.

On the Latin America side, the notes from Banco Estado were better in trading. Two names from Peru were also quoted as moving up, with Banco Internacional del Peru SAA (Interbank) and BBVA Banco Continental both quoted as above par.

There were no new deals in sovereigns, although there was spread compression at about 6 points on the index level, said Enrique Alvarez, head of research for Latin America and financial markets for IDEA Global.

Countries like Argentina and Venezuela found an upside, and they're focused on U.S. data and the dollar, while equity is looking for liquidity.

On the monetary side, the Chilean peso continues to be the leader of the pack, with copper prices rising. Alvarez said.

There was news out that the board of directors of Chile's state-run copper producer Corporacion Nacional del Cobre de Chile (Codelco) had given the go-ahead to issue up to $1.8 billion in debt both domestically and internationally.

"Anything Chile finds support, especially if it's related to copper. Codelco is the highest-rated [Chilean name]," Alvarez said.

There did not appear to be a change in Chile's bonds for the day, a market source said.

In the coming week, overall investors are waiting for the market to weaken, Alvarez said. He added that it's an important week coming up because U.S. non-farm payroll data comes out at the end of it.

Mexico's IXE plans deal

IXE Banco is planning a sale of 10-year tier 1 junior subordinated bonds (B/B+) in the coming week, a market source said.

The deal size is expected in the $100 million to $120 million range, with yield talked between 9¼% and 9¾%.

The sale was re-launched on Thursday from a previous attempt to bring it to the market on Feb. 8. That transaction was postponed due to market conditions.

The retail bank is based in Mexico City.

Edenor offers 12-year bonds

Argentina's Edenor is planning a sale of at least $150 million in 9¾% notes due 2022 concurrently with a tender and exchange offer, according to a press release.

The notes will be priced under Rule 144A and Regulation S, with proceeds going to finance the offer to purchase existing notes. The deal is concurrent with an exchange offer of 10½% senior notes due 2017 for the new notes due 2022, plus cash.

Pricing of the new notes is expected around Oct. 15, which is the early participation deadline for holders to validly tender existing notes.

The company distributes and sells electricity and is based in Buenos Aires.

Banco Estado's 10-year terms

Banco Estado Chile gave terms for its sale of $500 million of 4 1/8% 10-year notes (Aa3/A+) done late Thursday under Rule 144A, a market source away from the sale said Friday.

The notes (Aa3/A+) priced at 99.24 with a spread of 170 bps over Treasuries.

Deutsche Bank Securities and J.P. Morgan Securities LLC were the bookrunners.

A market source said the notes were trading late Friday at a bid of 100.35 and offer of 100.45.

The financial services company is based in Santiago, Chile.

Ecuador bonds stabilize

A sovereign bond from Ecuador had possibly bounced back, or at least stabilized on Friday, following news of a police revolt and news censorship on Thursday. The revolt came as the country talked of cutting the police force's benefits.

A market source said that Ecuador's outstanding bond had "marked down" on Friday and that there was not a lot of trading happening in them.

On Wednesday, the 9 3/8% bond due 2015 from the country was at 90 bid, 91 offer. By Thursday it was down to 87 bid, 92 offer, the source said, and then at 81 bid, 97 offer.

Its original price on Dec. 7, 2005 was 91.692 to yield 10¾%.

There weren't a lot of runs on it Friday because trading was quiet in emerging markets, the source said, adding that the bond had likely not changed a lot from the previous day.

Peruvian names trade up

The $400 million of 5¾% bonds due 2020 priced by Peru's Banco Internacional del Peru SAA (Interbank) had traded up by Friday afternoon after selling the previous day at 99.82.

A source quoted them at a bid of 100.1 with an offer of 100.35.

Another sale done by BBVA Banco Continental was also higher in trading. The tier one step-up notes due 2040 priced at par and were quoted by a trader at a bid of 102.25 with an offer of 102.5.

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