NEW YORK, Feb 25 (IFR) - Latin American credits remain well insulated from a new wave of selling that hit the curve of Brazilian state-run oil company Petrobras, after the company’s debt was downgraded to junk by Moody‘s.
“I think credit default swaps tell the story there, Brazil is closing 14bp wider and at one point traded as much as 30bp wider on the back of the Petrobras downgrade,” said one trader in New York.
“Colombia, Mexico and Peru are 2bp tighter. There is no problem anywhere else.”
Even bonds of other Brazilian corporates with strong ties to Petrobras appeared to weather the storm, with notes issued by construction companies Queiroz Galvao and Odebrecht still enjoying solid bids.
Odebrecht’s drillship bonds due 2022, for example, were bid today at a cash price of around 77, after trading as low as 70-71 in recent weeks, according to the trader.
Notes issued by Petrobras itself, however, were ending the day close to their intra-day wides, hit by selling from crossover accounts towards the end of the session, according to a second trader.
The company’s 2024s and 2044s were spotted at spreads of 577bp-567bp and 575bp-560bp respectively at the close.
Argentina’s Bonar 2024s slid by one point to a cash price of 104.5-105.0, as the sovereign began marketing a reopening of the notes aimed exclusively at non-US investors.
The sovereign is offering new Bonar 2024 notes via Deutsche Bank and JP Morgan, targeting primarily hedge funds and real money investors who recently participated into a bond sale from state-run oil company YPF, according to two people with knowledge of the offering.
Elsewhere in the region, Venezuelan bonds were benefiting from some buying appetite especially for high-coupon bonds.
The country’s 12.75% 2022s were ending the day up a point at 48.50-49.50, while state-run oil company PDVSA’s 8.5% 2017s were three quarters of a point higher at 66.25-66.75.
Mexican telco America Movil is meeting investors in Europe and the US this week as it seeks to market a global peso trade through BBVA, Citigroup, Credit Suisse, Deutsche Bank, HSBC and Morgan Stanley. Meetings will wrap up on February 27.
Mexican media company TV Azteca is bringing to market a rare project bond related to the development of the Andean country’s fiber optic network.
Costa Rica has chosen Deutsche Bank and HSBC as lead managers on an up to US$1bn international bond sale that could take place as early as this month.
Panama filed with the SEC to sell up to US$3.04bn in debt, raising expectations that the sovereign could soon come to the international bond market. (Reporting by Davide Scigliuzzo; editing by Shankar Ramakrishnan)