NEW YORK, April 24 (IFR) - Latin American credits were enjoying some spillover Friday from the euphoric response to yesterday's release of full-year results from Brazilian oil company Petrobras.
Stronger oil prices and rallying equity markets were also providing support for the region, where Paraguay is making an opportunistic US$280m tap of its 2023s today.
"Everyone is reconsidering their position now that Brazil isn't such a big risk any more," said Klaus Spielkamp, head of fixed-income sales at Bulltick. "It is a better environment."
New Petrobras management told investors yesterday about its strategy to cut debt and sell core assets as it seeks to address concerns about the company's rising leverage.
Fitch removed Petrobras from rating watch negative and affirmed its BBB- rating today, saying release of the financials averted a covenant violation and acceleration on its debt.
Spreads on the oil company's bonds continue to inch tighter, with the 2024s quoted this morning at 415bp-400bp. Meanwhile the sovereign's benchmark 2025s are also up at 101.10-101.50.
The primary market is also finally showing signs of life, with some US$5.5bn in new supply seen this week, including Argentina's local tap of its Bonar 2024s.
Paraguay was seizing the moment to tap its 2023s with initial price thoughts of 4.25%. Those bonds were trading today around 4.12%, according to Thomson Reuters data.
Bank of America Merrill Lynch and JP Morgan are acting as leads on the tap of the 144A/Reg S senior unsecured bonds, which are rated Ba1/BB/BB by Moody's, S&P and Fitch.
Recently minted issues are also holding their own.
YPF's new 2025 was quoted at 101.40-101.70 after pricing yesterday at 99.097 on books that reached close to US$5bn.
The new 10-year from Chilean utility Guacolda was also advancing in the secondary to be quoted at around 100.00-100.20 versus a re-offer price of 99.944.
Banco Latinoamericano de Comercio Exterior (Bladex), a Panama-based trade bank, will kick off fixed-income investor meetings through Bank of America Merrill Lynch and Citigroup.
The borrower, rated Baa2/BBB/BBB+, will be in London and Los Angeles on April 27, in Switzerland and Boston on April 28 and in New York and Philadelphia on April 29.
Banco de los Trabajadores (Bantrab) is wrapping up roadshows today as it markets a subordinated debt offering through Deutsche Bank.
The Guatemalan bank, which focuses on payroll-lending to public sector employees, is approaching investors with up to US$100m of 10-year subordinated loan participation notes, which are being recognized as Tier 2 capital by local regulators.
It is in Miami today. The bank carries corporate ratings of Ba3/BB- by Moody's and Fitch.
ACI Airport Sudamerica, controlling shareholder of the concessionaire of Uruguay's Carrasco airport, mandated Bank of America Merrill Lynch and Nomura for investor meetings that concluded last week in London and Los Angeles.
A potential senior secured 144A/Reg S deal backed by future dividends from a long-term airport concession contract may follow.
Pacific Rubiales, the largest private oil producer in Colombia, has kicked off investor meetings through Bank of America Merrill Lynch, Citigroup and HSBC. The company heads to Santiago on April 30, Los Angeles on May 4 and Miami on May 6. (Reporting by Paul Kilby; Editing by Marc Carnegie)