Panama prints new bond against supportive backdrop
By Davide Scigliuzzo
NEW YORK, March 11 (IFR) - Latin American credits firmed up towards the close on Wednesday but spreads inched wider as prices failed to keep up with US Treasuries, which continue to pare back recent losses.
"Treasuries have corrected but currency weakness is still weighing on the market," said a sovereign bond trader in New York.
Among sovereigns, Brazil underperformed as continued fallout from the widening corruption scandal at state-owned oil company Petrobras quickly overshadowed initial optimism over a tax deal between the government and congress.
Brazil's five-year credit default swaps ended the day 3bp to 4bp wider at around 290bp, after tightening by as much as 7bp earlier in the day.
Notes issued by petrochemical company Braskem dropped by five to six points in price to as low as 94, after a local paper Folha reported the company paid bribes to do business with Petrobras.
Elsewhere in the region, long-dated sovereign bonds from the likes of Chile, Peru and Uruguay were well supported. Such names were unchanged to half a point higher in price, but still 1bp to 2bp wider against stronger US Treasuries.
In the primary market, the stable backdrop provided good support for Panama, which raised US$1.25bn Wednesday through the sale of a 10-year bond on the back of US$5.5bn in demand.
The notes priced at a final spread of 178bp over US Treasuries, tight to guidance of 180bp (+/-2bp) and inside initial price thoughts of 200bp area. Bankers calculated final new issue premiums of anywhere between 13bp to 22bp, depending on where they spotted the underlying curve. Continuación...