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.
In the primary markets, Ecuador could return to the international capital markets with a new US dollar bond sale as soon as next week, as it seeks to plug a widening financing gap in the wake of falling oil prices.
Investor meetings, which began in London on Monday via Citigroup, will continue in Boston on Tuesday, Los Angeles on Wednesday, San Francisco on Thursday and New York on Friday.
The country is looking to raise US$1bn, one of the sources said.
Peruvian state-controlled mortgage bank Fondo Mivivienda, rated BBB+ from both S&P and Fitch, has mandated Deutsche Bank and JP Morgan to organize a series of fixed-income investor meetings in Europe starting in London on Wednesday. The borrower will move on to Amsterdam on Thursday and Paris on Friday, and the following week it will meet investors in Frankfurt on March 16.
Mexican media company TV Azteca is bringing to market a rare project bond related to the development of the Andean country’s fiber optic network.
Panama has filed with the SEC to sell up to US$3.04bn in debt, raising expectations that the sovereign could soon come to the international bond market.
Reporting by Davide Scigliuzzo; Editing by Paul Kilby