LatAm corporates defy US Treasury sell-off
By Davide Scigliuzzo
NEW YORK, Feb 20 (IFR) - Latin American corporate bonds stood firm on Friday against a back-up in US Treasuries which reversed earlier gains on news that euro-zone creditors had agreed in principle to extend Greece's bailout package.
Light supply in the primary market and robust inflows into hard-currency emerging market funds have helped to push prices higher this week.
"Today we decoupled from weak commodities, and this morning with the rally in US Treasuries the market was just on steroids," said a corporate bond trader in New York.
Coroporate bonds remained well bid even as US Treasuries reversed gains in the afternoon, with the yield on the 10-year note rising back to 2.10% from as tight as 2.04.
"Credit is still very well bid and cash (bonds) are outperforming credit default swaps," said the trader.
Corporate bonds in Colombia were among the outperformers, having tightened as much as 10bp on the day, followed by corporates in Chile and Mexico, which ended 7bp and 5bp tighter respectively.
Among the most recent issues, Chilean retailer Cencosud's 2025 were ending the week at 100.875-101.125, while the 2045s were spotted at 99.875-99.125.
"US real money (investors) are buying, and we have local demand and European demand," said the trader. Continuación...