Calendar takes aboard China Shanshui Cement, China Hongqiao; Europe sees better sellers

By Paul A. Harris

Portland, Ore., July 11 - Emerging markets bond prices fell on Monday as the travails of distressed European sovereigns and European banks got investors' full attention, sources said.

Most of the primary market news came out of Asia.

China Shanshui Cement Group Ltd. plans to roadshow a renminbi-denominated offering of guaranteed notes.

And China Hongqiao Group Ltd. plans to begin a roadshow on Tuesday for an offering of senior notes.

Acors Dorados off highs

Against the backdrop of volatile and falling stock prices around the globe, trading in emerging markets corporate bonds was slow during the Monday session, according to a trader on the East Coast of the United States.

Argentina's Arcos Dorados Holdings Inc. saw its freshly minted 10¼% notes due July 13, 2016 (Ba2//BBB-) at 101 bid, 101¼ offered, off from highs of 101½ bid, 101 5/8 offered, the trader said.

The company priced ARS 400 million of the paper at par last week.

Europe sees better sellers

Through the end of last week, emerging markets investors held steady in the face of the dramatically widening spreads of Greece, a Zurich-based trader said.

That changed on Monday.

"With Greece, Italy and Portugal under huge pressure, we're seeing better sellers," the trader said just after the European close.

Up to the middle of last week, "real money" continued to flow into the Middle East and Russia, the trader said.

Eastern Europe did not benefit because the big U.S. accounts had already bought into long duration Eastern European paper.

With Monday's headlines and the dramatic widening in the debt of Portugal, Ireland and others, there were better sellers - albeit the "fast money" - in the long duration bonds of Croatia, Hungary and Poland.

"For the past two to three weeks, the locals have been active buyers in Russia and the Middle East," the trader said.

"They had been supporting the market up until this morning. "Now, although they are not selling, they are more than happy to sit on the offer. There is no bid. I would say that's a major change."

Russian credit default swaps were 154 bid, 157 offered, up five points on the day, the trader said.

Kosep talks dollar deal

Korea South-East Power talked a proposed $300 million maximum offering of 5.5-year senior notes (A1/A) at a 215 basis points spread to Treasuries.

Citigroup, Goldman Sachs and Morgan Stanley are the bookrunners for the capital expenditures deal.

China Shanshui plans roadshow

China Shanshui Cement Group plans to roadshow a renminbi-denominated offering of guaranteed notes (/BB-/) in Asia, with stops including Hong Kong and Singapore.

BOC International, Credit Suisse, Deutsche Bank and UBS are the joint bookrunners.

The Hong Kong-based producer of clinker and cement plans to use the proceeds to refinance debt and for general corporate purposes.

China Hongqiao starts Tuesday

China Hongqiao Group plans to begin a roadshow on Tuesday for an offering of senior notes (/BB-/).

The aluminum products manufacturer is contemplating an issue of dollar-denominated or renminbi-denominated senior notes.

J.P. Morgan, Barclays Capital and Deutsche Bank are the bookrunners.

Proceeds from will be used to expand the company's electricity production facilities to about 2,400 megawatts of total installed capacity.

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