Petrobras bonds tighten sharply on asset sales news
By Davide Scigliuzzo
NEW YORK, March 3 (IFR) - Petrobras bonds tightened by as much as 50bp-60bp, as traders and investors cheered an announcement on Tuesday that the battered state-run oil company will sell US$13.7bn worth of assets.
The Brazilian company's notes outperformed other corporate credits in the region, but some thought the market overreacted given the company's difficulties in publishing audited financial statements following a corruption investigation.
"The asset sales are fine, but they are not a game changer," said a corporate bond trader in New York. "The bonds rallied like they published results or something."
The long end of the company's curve ended the day some 50bp tighter from Monday, compared to a 35bp spread compression at the short end and a 40bp tightening in the belly, said a trader.
Short covering and increasing appetite for Petrobras paper from real-money investors both contributed to the rally, said the trader.
Petrobras 2024s and 2044s were spotted closing at spreads of around 493bp and 500bp respectively.
Elsewhere in the region, corporate bonds were tracking US Treasuries lower or slightly underperforming.
Notes issued by Mexican state-owned oil company Pemex, for example, were some 7bp wider at the long end and about 1bp tighter at the belly. Ecopetrol's 2025s were also 1bp tighter. Continuación...