LatAm credits weather Petrobras storm

miércoles 25 de febrero de 2015 18:22 GYT

By Davide Scigliuzzo

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.   Continuación...