Profit taking hits LatAm credits as Ecuador eyes new issue
By Davide Scigliuzzo
NEW YORK, March 9 (IFR) - Latin American credits largely ended the day weaker as expectations of a rate rise in the US this summer spurred a bout of profit-taking.
"Sentiment is overall negative, especially the view on Brazil, and valuations are pretty rich in other countries like Mexico and Chile," said a corporate bond trader in New York. "We closed tight on Friday and we saw some take profits today."
After faring better than their peers at the end of last week, Brazilian credits was once again underperforming Monday to close 15bp-20bp lower in price terms.
Brazilian state-run oil company Petrobras took a tumble Monday, with its 2024s closing 20bp wider at a spread of 510bp-500bp. In contrast, Mexican and Chilean corporates were ending the day in relatively better shape, or 5bp-10bp wider.
Among sovereigns, Venezuelan bonds sold off by a point and a half after the United States declared the country a national security threat and ordered sanctions against seven officials.
Those individuals, including top domestic security and intelligence officials, will have their US assets frozen and will be denied entry into the US, according to Reuters.
Venezuela's 2022s, for example, were ending the day at 47.75-48.25, while PDVSA's 2017s were spotted at 63.25-63.75, said a second trader.
Argentine paper, however, continued to enjoy strong demand, with the US dollar-denominated Par notes trading up a point to a new record of 103.25. Continuación...