LatAm credits end mixed, as America Movil taps in pesos
By Davide Scigliuzzo
NEW YORK, March 4 (IFR) - Argentina proved to be the top performer in a mixed day for the region, where Brazilian credits came under pressure after lawmakers pushed back on President Dilma Rousseff's austerity plans.
Brazil's currency fell below the psychological level of 3 reais to the dollar for the first time in over 10 years after Congress rebuffed tax hikes designed to put the country's fiscal house in order.
Credit soon followed suit with the country's bonds suffering price swings throughout the day before recovering most intraday losses by the close.
The country's five-year CDS, however, ended the session some 12bp wider at 250bp, after hitting 255bp, according to a New York-based trader.
"Brazil was under pressure all day," said a sovereign bond trader in New York. "We saw locals adding to bearish trades."
In the high-yield segment, however, some Brazilian corporate credits have been staging an impressive recovery of late.
Intercement's 2024s for example, were bid on Wednesday at 82.5, a point higher on the day and some 10 points stronger compared to about a week ago, said the trader. Odebrecht Drilling's 2022 were also up a point, wrapped around a cash price of 81.
Among sovereigns, Argentine bonds enjoyed a strong bid after the judge presiding over the country's standoff with holdout investors decided to hold off a decision on whether payments on some of the country's foreign currency, local-law notes should continue. Continuación...