LatAm credits tighten in quiet May Day session

viernes 1 de mayo de 2015 10:03 GYT

By Davide Scigliuzzo

NEW YORK, May 1 (IFR) - Latin American credits were enjoying some modest spread tightening on Friday, but liquidity remained light as May Day celebrations across the globe slowed trading activity.

"There is not a whole lot going on, but things generally feel strong," said a corporate bond trader in New York. "Bids are generally tighter than what we saw at the close yesterday and offers are a lot less competitive."

In Brazil, investors were largely shrugging off Standard & Poor's decision to downgrade Vale to BBB from BBB+, with spreads on the miner's bonds opening some 3bp-4bp tighter.

The company's 2022s, for example, were quoted at 267bp-260bp, while the 2042s were spotted at 353bp-347bp, according to a second New York-based trader.

"The metals and mining sector has been punished for a long time, but quite frankly we have seen a good rebound, and iron ore prices are up sharply from the lows," said the first trader.

Notes of state-run oil company Petrobras, meanwhile, were broadly unchanged on the day, with 2024s and 2044s quoted at 425bp-420bp and 461bp-456bp respectively.

Positive flow data for emerging market bond funds was also seen supporting sentiment. According to EPFR data quoted by UniCredit, US$967m flowed into the asset class during the week ended April 29, marking the largest weekly inflow in nine weeks.

Hard-currency bond funds posted US$798m of inflows, while local currency funds recorded US$87m of outflows. Blended-currency funds accounted for the remaining net inflow.   Continuación...