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.”
The primary market was fairly quiet, but Guatemala’s Banco de los Trabajadores (Bantrab) appeared to struggle to bring its planned US$100m 10-year Tier 2 bond issue over the finish line.
After setting yield guidance of 10.5% for the sale earlier in the week, sole lead Deutsche Bank indicated order books would go subject at the close of business on Tuesday, with pricing expected to follow on Wednesday.
At the close on Wednesday, market participants said no updates had been released since.
Votorantim Cimentos (Baa3/BBB/BBB) has mandated Citigroup, Deutsche Bank, HSBC, Banco Votorantim, BB Securities, Bank of America Merrill Lynch, MUFG and Santander GBM to arrange a series of investor meetings ahead of a potential euro-denominated bond issue.
The meetings will take place in Frankfurt and Munich on May 4, London on May 5, and Amsterdam and Paris on May 6.
JB y Compania SA de CV (Jose Cuervo) kicked off 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.
After visiting London on Wednesday, the borrower will be in Boston on Thursday and Los Angeles on Friday. It will head to Chicago on May 4 and New York at May 5. The spirits company, rated BBB/BBB by S&P and Fitch, is the world’s largest tequila producer.
Banco Latinoamericano de Comercio Exterior (Bladex), a Panama-based trade bank rated Baa2/BBB/BBB+, has wrapped up investor meetings via Bank of America Merrill Lynch and Citigroup.
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 Thursday, Los Angeles on May 4 and Miami on May 6. (Reporting by Davide Scigliuzzo; Editing by Natalie Harrison)