NEW YORK, March 13 (IFR) - A plunge in the Brazilian Real and in oil prices, combined with reports that state-run Petrobras is seeking to further delay the release of audited financial statements, provided an explosive mix for Brazilian credits on Friday.
Corporate bonds in the country, led by Petrobras, were ending the session as much as 30bp wider in spreads terms, underperforming other corporate credits in Latin America, whose spreads widened by just 5bp.
"You have the Brazilian Real trading at its weakest level, oil prices near their lowest and Petrobras not making the right comments," said a corporate bond trader in New York. "One you put those three together, it's an explosive mix."
The Brazilian Real plunged by as much as 3.7% on Friday to 3.28 against the dollar - its weakest level since 2003 - while WTI oil prices lost over 4% to approach recent lows at just above US$45 a barrel.
Petrobras bonds extended earlier losses, closing the day some 30bp wider in spread terms across the curve, following a local report that the company is in talks with creditors to extend a deadline for publishing audited financial statements.
Its 2024s and 2041s were seen ending the day at spreads of 560bp and 550bp respectively.
It was a similar story among sovereign credits, where Brazil's curve widened by some 10bp-15bp on the day, while the rest of the region widened by a smaller 7bp to 10bp.
Accounts' light positions were also exacerbating losses, with large offers from crossover accounts finding very few bids in the market, said the trader.
Venezuelan bonds were also suffering from the oil weakness, but very few notes were actually changing hands.
"I haven't seen a single Venezuelan sovereign bond trade today, but (state-run oil company) PDVSA is down by a point to a point and a half," said a second trader in New York.
PDVSA's 2017s and 2024 were spotted at 61.25 and 31.25 respectively at the close.
The Republic of Peru (A3/BBB+/BBB+) has hired BBVA, Deutsche Bank and Morgan Stanley to arrange meetings with fixed-income investors in New York on March 16, Los Angeles and London on March 17, and Boston on March 18.
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 budget gap in the wake of falling oil prices.
Peruvian state-controlled mortgage bank Fondo Mivivienda, rated BBB+ by both S&P and Fitch, has mandated Deutsche Bank and JP Morgan to organize a series of fixed-income investor meetings. The borrower will wrap up investor meetings 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. (Reporting by Davide Scigliuzzo; Editing by Paul Kilby)