LatAm credits outperform UST on broad-based buying
By Davide Scigliuzzo
NEW YORK, March 2 (IFR) - Latin American credits continued to enjoy a strong bid on Monday, with most names in the region ending the day stronger.
With demand from a broad group of investors supporting bond prices, credit spreads were largely tighter against yields in the US Treasury market, where the 10-year benchmark widened Monday by 9bp to 2.09%.
"There are very few sellers and lots of clients have inflows," said a corporate bond trader in New York. "It's emerging market (accounts), real money, US and European crossover and retail. Everyone is buying."
In Brazil, bonds issued by state-run oil company Petrobras and miner Vale were ending the day up to 20bp and 10bp tighter respectively, according to the trader.
Petrobras's 2024s, for example, closed at a spread of 530bp-520bp, while Vale's 2022s were ending the day at 270bp-260bp over.
Credits in the beef sector were also performing strongly, with JBS's 2024s closing up by around a point at 103.0-103.5.
Among the underperformers was Colombia-focused exploration and production company Pacific Rubiales, whose notes lost about a point following a one-notch downgrade by Fitch.
The rating agency, which downgraded the credit to BB and revised its outlook to negative, said the action reflects the effect of declining oil prices on the company's credit profile. Continuación...