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.
In primary markets, Banco de los Trabajadores (Bantrab) has set guidance of 10.5% area on its planned issue of a US$100m 10-year Tier 2 subordinated bond, in line with initial price thoughts of 10.5% announced on Monday.
Order books for the sale will go subject at New York's close of business on Tuesday, with pricing expected to follow on Wednesday.
ACI Airport Sudamerica, the controlling shareholder of the concessionaire of Uruguay's Carrasco airport, is out with price guidance of 7.25% area on a US$200m 2032 senior secured bond ahead of expected pricing on Tuesday.
The bond, which has an average life of 12 years, is backed by shares in Cerealsur and Puerta del Sur (PdS), which are acting as guarantors after the repayment of existing PdS notes is made. Covenants include limitations on additional debt, dividends, sale of assets, liens, sales and leaseback, M&A and the transfer of assets.
The listing will be in Luxembourg and the bonds will be governed by New York law. Expected ratings on the 144A/Reg S bond are BB+/BB+ by S&P and Fitch. Joint bookrunners are Bank of America Merrill Lynch and Nomura.
Banco de los Trabajadores (Bantrab) is out with guidance of 10.50% area on a new US$100m 10-year Tier 2 subordinated bond ahead of expected pricing on Wednesday.
The Guatemalan bank, which focuses on payroll-lending to public sector employees, wrapped up roadshows last week through Deutsche Bank. The bank has corporate ratings of Ba3/BB-, while the bond is expected to be rated B2/B+.
JB y Compania SA de CV (Jose Cuervo) will start fixed-income investor meetings this week through Bank of America Merrill Lynch and Citigroup as it seeks to market a possible senior unsecured US dollar bond.
The borrower will be in London on Wednesday, in Boston on Thursday and in Los Angeles on Friday. The following week, it will head to Chicago on May 4 and New York at May 5. The company, rated BBB/BBB by S&P and Fitch, is a global spirits company and the largest tequila producer in the world.
Banco Latinoamericano de Comercio Exterior (Bladex), a Panama-based trade bank, was to kick off fixed-income investor meetings in London and Los Angeles today through Bank of America Merrill Lynch and Citigroup.
The borrower, rated Baa2/BBB/BBB+, will be in Switzerland and Boston on Tuesday, and New York and Philadelphia on Wednesday.
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 Davide Scigliuzzo; Editing by Shankar Ramakrishnan)