Weak Treasuries weigh on LatAm credits, primary picks up

jueves 30 de abril de 2015 10:33 GYT

By Davide Scigliuzzo

NEW YORK, April 30 (IFR) - Latin American credits got off to a weak start on Thursday, as higher US Treasury yields continued to weigh on the asset class amid thin trading volumes.

"It seems like Treasuries are not helping the market again," said one broker in Miami. "I haven't seen many trades going through, but prices are wider."

Another day of weakness across the US Treasury curve - where yields on the 10-year and 30-year benchmarks widened by roughly 6bp to 2.09% and 2.79% respectively - saw traders revise bond prices lower across the region.

Brazil's benchmark 2025s, for example, were quoted half a point lower in early trading at a cash price of 98.75-99.40 after closing on Wednesday at 99.5-100.0.

"It is the end of the month and I guess everybody has already played their positions," said the broker, who argued the market will be mostly reacting to moves in Treasuries throughout the session.

In spite of a quiet start in secondary markets, primary activity has picked up pace, with two deals poised to price on Thursday.

The Dominican Republic plans to raise US$1bn though a tap of its 10 and 30-year bonds via Bank of America Merrill Lynch and JP Morgan.

The sovereign is offering investors initial price thoughts of 5.25% area on a reopening of its 5.5% 2025s and 6.65% area on a tap of its 6.85% 2045s.   Continuación...