LatAm credits end off the lows in volatile session

miércoles 29 de abril de 2015 17:10 GYT

By Davide Scigliuzzo

NEW YORK, April 29 (IFR) - Latin American credits pared some losses towards the end of a volatile session Wednesday, after a Federal Reserve policy statement acknowledged weaknesses in the US economy and cemented views that a rate hike is still some way off.

Spreads of investment-grade corporates in Latin America were ending the session some 2bp to 10bp wider. They had widened by a sharper 5bp to 15bp in early trading, triggered first by a weak tone in Europe, and later by disappointing US GDP data, according to a corporate bond trader in New York.

Hours before the Fed statement, data showed US economic growth slowed sharply in the first quarter.

"We are closing off the wides and the street is generally better squared than this morning," said the trader. "We saw some buying on the weakness here."

Bonds of Brazilian state-run oil company Petrobras, were ending the session off their wides, with the 2024s and 2044s quoted at spreads of 431bp-426bp and 468bp-458bp respectively, according to the trader.

It was a similar story for high-yield credits, which were ending the day about a quarter of a point weaker in price, after losing as much as three-quarters of a point in early trading.

Mexican cement company Cemex, one of the bellwhether names in that segment, saw its 2025s lose about a quarter of a point on the day. The notes were quoted at 102.5-102.75 at the close, according to a second corporate bond trader in New York.

"The market is slightly weaker but we haven't seen a ton of volume," said the second trader. "There was some fear (prior to the release of the Fed statement), but then we saw a bit of a relief rally in equities and kind of the same sentiment in EM."   Continuación...