Profit taking weighs on Brazil, Venezuela bonds

martes 28 de abril de 2015 10:14 GYT

By Davide Scigliuzzo

NEW YORK, April 28 (IFR) - Investors took profits on corporate names in Brazil early on Tuesday after last week's rally, while credits in Mexico and the Andean region continued to grind tighter.

Bonds of Brazilian state-run oil company Petrobras, were quoted between 5bp and 15bp wider in early trading, with the 2024s and 2044s spotted at spreads of 414bp-407bp and 452bp-444bp respectively, according to a New York-based broker.

Bonds of other Brazilian corporates, which had benefited from Petrobras's release of audited financial statements last week, were also losing some ground, with most names unchanged to 5bp wider in spreads, said another corporate bond trader in New York.

"After a solid three days of outperformance of Brazilian corporates versus the rest of the world, we are seeing a bit of a reversal," said the trader.

Petrobras's underperformance comes as Moody's late on Monday affirmed the company's rating at Ba2 with a stable outlook, after concluding a review for a potential downgrade.

Moody's said that while liquidity risks have eased markedly since Petrobras was downgraded to Ba2 in February, the company's near term financial performance will be significantly weaker than previously expected, with leverage measures set to deteriorate further through 2015.

Away from Brazil, the market tone was slightly more positive as corporate credits in Mexico, Chile, Colombia and Peru opened between 3bp and 5bp tighter after a strong session on Monday, as they continue to catch up with their Brazilian peers after lagging last week's rally.

Among sovereigns, Venezuelan bonds opened about a point lower. The sovereign's 2022s, for example, were quoted at 53.75-54.75, while state-owned oil company PDVSA's 8.5% 2017s were spotted at 75.25-75.75.   Continuación...