Russia, Axiata, AngloGold, Banco do Brasil price; Fibria sets roadshow; Braskem mandates

By Christine Van Dusen

Atlanta, April 22 - Debt-heavy Greece remained on investors' minds on Thursday but didn't really infect emerging markets, which saw the pricing of an awaited issue from Russia as well as continued activity in Latin America, market sources said.

"The market's softer today," said Enrique Alvarez, debt strategist with think tank IDEAglobal. "Greece continues to be a very large concern for the market, though it has not turned into a factor that has created a knee-jerk reaction. I think it will be very influential, but at this point it hasn't caught on with emerging markets."

The bad news "is really focused more on the developed world, with Eurozone issues around Greece," said Cameron Brandt, global senior analyst for data tracker EPFR Global.

And with earnings from U.S. companies, investors have seen "somewhat of a noticeable surprise to the upside," Alvarez said. "So there's some confidence in a bounce-back scenario."

All of this "has helped preserve the risk tolerance level and offset the Greece effect," he said.

Spreads on Thursday were "a tad bit wider, though nothing overly remarkable in the context of very, very large risk-negative movements in the Mediterranean," Alvarez said.

Russia, Axiata price

The big news of the day was the pricing of Russia's two-tranche eurobond deal totaling $5.5 billion, with $2 billion 3 5/8% notes due 2015 pricing at 99.475 to yield Treasuries 125 basis points and $3.5 billion 5% notes due 2020 at 99.363 to yield Treasuries plus 135 bps.

The Russian issue was "very well received," Brandt said.

Also on Thursday, the primary saw Malaysia's Axiata Group Bhd. price $300 million 5 3/8% 10-year notes at 99.939 to yield Treasuries plus 163 bps.

And South Africa's AngloGold Ashanti Ltd. released details on the pricing of its two-tranche deal totaling $1 billion, with $700 million 5 3/8% notes due 2020 at 99.85 to yield Treasuries plus 165 bps and $300 million 6½% notes due 2040 at 98.435 to yield Treasuries plus 200 bps.

Latin America on hot streak

Latin America continued to see a lot of issuer activity, Alvarez said. Though one deal that was expected to come to market sooner than later may be "a little further out," he said, referring to the Dominican Republic's planned dollar-denominated benchmark-sized offering of sovereign global bonds. A roadshow is underway.

"The window of opportunity is going to be very small for them, because obviously they're not a very highly rated issuer and they have not been in the market for quite a long time," Alvarez said. "There's also some remnant bitterness regarding their restructuring a few years back."

Given this, the only reason investors like the Dominican Republic deal is because their risk appetite is up. "That's really convenient" for the sovereign, he said. "There's nothing else favoring them. The fact that they're going to launch says a lot about appetite for Latin American issues."

Several issuers are counting on that healthy appetite. On Thursday Banco do Brasil priced, in a reopening, $450 million 4½% senior notes due 2015 at 100.684 to yield Treasuries plus 180 bps. Fibria Overseas Finance Ltd. is holding a roadshow for a planned dollar-denominated benchmark-sized issue of notes due 2020.

And Braskem Finance Ltd. mandated Bradesco BBI, HSBC and Santander as joint bookrunners for a planned 10-year dollar-denominated benchmark-sized offering of notes.

This adds to other recent issues the region. From Brazil, there was Banco Panamericano SA, Banco Industrial E Comercial SA (BicBanco), the Brazil sovereign and Banco Bradesco SA. Also from the region came Chile's Sociedad Quimica y Minera de Chile and Banco Santander Chile.

"There's large liquidity flow still outstanding, which is very favorable to Latin American debt in particular," Alvarez said.

Inflows up again

Emerging markets bond funds saw inflows of $1.28 billion for the week ended April 21, according to data tracker EPFR Global. It was the second-best week on record, following last week's inflows of $1.8 billion.

"The asset class is hot at the moment," Brandt said. "The issuers are taking advantage of that."

Russia prices eurobond

The Russian Federation priced a two-tranche eurobond totaling $5.5 billion (Baa1/BBB/BBB), with $2 billion 3 5/8% notes due April 29, 2015 at 99.475 to yield Treasuries 125 bps and $3.5 billion 5% notes due April 29, 2020 at 99.363 to yield Treasuries plus 135 bps, according to a market source.

Both tranches priced in line with talk.

Barclays Capital, Citigroup, Credit Suisse and VTB Capital were the bookrunners for the Rule 144A and Regulation S deal.

Axiata prices first issue

Malaysia's Axiata Group priced $300 million 5 3/8% 10-year notes (Baa2/BBB-/) at 99.939 to yield Treasuries plus 163 bps, according to company announcement.

Goldman Sachs, Morgan Stanley and CIMB Bank were the bookrunners for the deal, which was sold through subsidiary Axiata SPV 1 (Labuan) Ltd.

The notes are Axiata's first bond issue. The company said the deal was oversubscribed by more than eight times.

Proceeds will be used to repay a loan to subsidiary SunShare Investments Ltd.

Axiata is a telecommunications and consulting services provider based in Kuala Lumpur.

Banco do Brasil prices notes

Banco do Brasil priced $450 million 4½% senior notes due Jan. 22, 2015 (Baa2/BBB-/BBB-) at 100.684 to yield Treasuries plus 180 bps, according to a market source.

The issue is a reopening of its original $500 million 4½% senior notes due 2015, which priced on Jan. 14, 2010 to yield Treasuries plus 200 bps.

Deutsche Bank, JPMorgan, BB Securities and Votorantim Securities were the bookrunners for the Rule 144A deal, which was talked at Treasuries plus 180 bps to 185 bps.

Banco do Brasil is a Sao Paulo-based lender.

AngloGold releases details

South Africa's AngloGold Ashanti released details on the pricing of its two-tranche note offering totaling $1 billion, with $700 million 5 3/8% notes due April 15, 2020 at 99.85 to yield Treasuries plus 165 bps and $300 million 6½% notes due April 15, 2040 at 98.435 to yield Treasuries plus 200 bps, according to a company filing.

Barclays Capital, Goldman Sachs, RBC Capital Markets and Standard Chartered were the bookrunners for the deal, which includes a change-of-control put at 101% with a ratings downgrade.

Proceeds are expected to total about $983 million and will be used to repay and retire a term loan with Standard Chartered Bank and for general corporate purposes, including to fund capital expenditures and for the development of the company's project pipeline.

AngloGold is a gold company based in Johannesburg, South Africa.

Fibria sets roadshow

Brazil's Fibria Overseas Finance is holding a roadshow for a planned dollar-denominated benchmark-sized issue of notes due 2020 (expected Ba1/BB/BB), according to an informed market source.

Bank of America Merrill Lynch and Santander are the bookrunners for the Rule 144A and Regulation S offering.

The deal could total $500 million with possible upsizing to $750 million.

Conference calls will take place in Europe on Friday, followed by a roadshow on Monday in Los Angeles, on Tuesday in New York, on Wednesday in Boston and on April 29 in New York again.

Proceeds will be used for general corporate purposes.

Fibria Overseas is a Sao Paulo-based paper and pulp company.

Braskem taps bookrunners

Braskem Finance has mandated Bradesco BBI, HSBC and Santander as joint bookrunners for a 10-year dollar-denominated benchmark-sized offering of notes (expected Ba1/BB+/BB+), according to a market source.

The deal will be launched subject to market conditions following a roadshow in Europe and the United States.

Braskem Finance is a Cayman Islands-based subsidiary of Braskem, a petrochemical company based in Sao Paulo.

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