Emerging market debt trades in tight ranges; Ukrexim sets price talk; Woori to start marketing

By Reshmi Basu and Paul A. Harris

New York, Aug. 29 - Emerging market debt traded around the unchanged mark Tuesday during another illiquid summer session.

However there were signs of life in the primary market as news of several planned offerings emerged.

In the primary market, the State Export-Import Bank of Ukraine (Ukrexim) set price talk for a dollar-denominated five-year bond offering in the area of 7¾%.

The roadshow will wrap up in London on Aug. 30.

Credit Suisse, Deutsche Bank and UBS are joint lead bookrunners for the Regulation S transaction.

Out of Korea, Woori Bank will begin a roadshow on Friday in Asia for a dollar-denominated offering of five-year senior bonds (A3/A-/A-).

The roadshow is scheduled to conclude on Sept. 6, with pricing expected thereafter.

ABN Amro, JP Morgan, Merrill Lynch & Co. and Woori Investment & Securities are managing the sale.

Over to Brazil, petrochemical manufacturer Braskem SA plans to issue $275 million of new notes in September.

Proceeds from the new issuance will be used toward the company's current tender offer, in which it plans to repurchase all $275 million of its 12½% notes due 2008.

The deal will be structured as a Rule 144A/Regulation S transaction.

Details on the bookrunners were not available but ABN AMRO Bank NV, London Branch and Citigroup Global Markets Inc. are the dealer managers for the tender offer, which has an initial deadline of Sept. 18.

EM trades in tight ranges

Emerging market debt traded in narrow ranges Tuesday amid light volumes, as the release of the minutes from the Federal Open Market Committee failed to trigger momentum in one direction or another.

The Aug. 8 move to leave Fed fund rates unchanged came after 17 consecutive hikes. The minutes said the decision was "a close call" and the pause "did not necessarily mark the end of the tightening cycle".

However, the news failed to summon much action, given that it did not reveal a new angle, according to market sources.

With so many investors out, trading has been "negligible" in the last few weeks, according to a trader.

Meanwhile Brazil's external debt traded sideways throughout the session. In trading, the country's benchmark bond due 2040 lost 0.05 to 129.50 bid, 129.65 offered.

Losers included Colombia and Turkey. The Colombia bond due 2033 gave up 0.25 to 133.75 bid, 134.75 offered while the Turkish bond due 2030 lost 0.25 to 146.75 bid, 147.25 offered.

Colombia to resume debt buyback

In other developments, Colombia's government said it would start up its debt buyback program on Wednesday, planning to purchase up to COP1.5 billion in TES bonds. The bonds carry maturity dates of November 2007, April 2008 and July 2009, April 2012 and September 2014.

The buyback will be conducted during a two-stage auction, of which COP1.2 billion will repurchased via a competitive Dutch auction, followed by a COP 300 million in a non-competitive auction, according to a market source.

According to the source, the deal announcement has put the TES curve back in positive territory for the second consecutive session, following last week's choppy performance.

The benchmark TES bonds due 2020 saw their spread widen by 50 basis points last week. On Aug. 18, the bond was yielding 9.14%. On Tuesday, the bond was spotted at a yield of 9.48%.

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