Emerging markets tighten; Korea Development Bank raises $750 million; Noble Group on tap

By Paul A. Harris

St. Louis, Feb. 3 - Against a backdrop of softness in the U.S. stock markets pm Wednesday, the EMBI-Plus index narrowed by 6 basis points during the New York trading session to end at 296 bps bid, according to a market source.

Latin American debt weakened slightly during the session in the United States, a New York-based syndicate banker said.

Meanwhile, earlier in European trading, credit default swap spreads trended narrower, according to a source there.

Brazil five-year CDS were 136.625 bps mid during the European afternoon, 4.375 bps tighter on the day.

Gazprom five-year CDS were 268.375 mid, unchanged.

Ukraine five-year CDS were 905 bps mid, 22 bps tighter.

Korea Development Bank upsizes

Asia loomed large in Wednesday's primary market activity.

Korea Development Bank priced an upsized $750 million issue of 4 3/8% 5.5-year fixed-rate senior notes (A2/A/A+) at a 203 basis point spread to Treasuries.

The spread came tight to the Treasuries plus 205 bps price talk.

The note offering, which was upsized from a planned $500 million, was priced at 99.724 to yield 4.432%.

Bank of America Merrill Lynch, BNP Paribas, Daewoo Securities, HSBC and Morgan Stanley managed the sale.

Bank of China (HK) gives talk

Meanwhile Bank of China (Hong Kong) Ltd. talked its benchmark-sized offering of dollar-denominated 10-year lower tier 2 fixed-rate notes (expected ratings A1/BBB+/A-) at a 200 basis point spread to Treasuries, to yield about 5.6%.

UBS, Bank of China and Deutsche Bank are bookrunners for the Rule 144A and Regulation S offering.

Noble Group on tap

Elsewhere Hong Kong's Noble Group is in the market with a $400 million add-on to its 6¾% global bonds due Jan. 29, 2020 (expected ratings Baa3/BBB-).

Goldman Sachs & Co. is leading the deal.

Proceeds will be used to refinance debt.

The original $850 million issue priced at 99.105 to yield 6 7/8% last October.

Lithuania books close Thursday

The Republic of Lithuania is expected to bring $1 billion-plus of new global bonds (Baa1/BBB/BBB), according to an informed source, who added that the order book closes on Thursday.

Barclays Capital, HSBC Bank plc and the Royal Bank of Scotland plc are leading the deal.

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