Argentina shines in mixed session for LatAm credits

lunes 23 de febrero de 2015 18:27 GYT

By Davide Scigliuzzo

NEW YORK, Feb 23 (IFR) - Argentina bonds proved to be the star performers in what was a mixed session for a region where Brazilian and Venezuelan assets continue to trade poorly.

Low-beta credits such as Chile and Peru also enjoyed strong demand thanks to a rally in US Treasuries, with the yield on the US 10-year benchmark note compressing by some 6bp Monday.

Yet it has been Argentina's stellar surge in prices over the past few sessions that surprised, especially given uncertainties over a US court hearing next week to decide whether payments on some local-law notes should continue.

"Argentina is trading extremely well," said a sovereign bond trader in New York. "I think it is a combination of shorts getting stopped out, distressed investors stepping out and very positive technicals."

The country's local-law Bonar 2024s, for example, were ending the day at a cash price of 106.0, the notes' highest level since they were first issued in May 2014, according to Thomson Reuters data.

Pars and Discount notes, which the sovereign default on last year, were also trading at or near all-time highs, to be quoted at 55.5 and 100.0 respectively.

Brazil was once again the underperformer, with its curve seen closing lower in price and wider in spread terms. The 2025s, for example, ended the session a point down at a cash price of 97.0.

Hurt by a 2% slide in oil prices, Venezuelan bonds were also suffering amid light volumes, with the 2022s ending the day at 45.75-46.75, down half a point from Friday.   Continuación...