LATAM WRAP-Brazilian and commodity credits take another tumble
By Paul Kilby
NEW YORK, July 24 (IFR) - Weaker commodity prices and concerns about Brazil's credit standing continued to plague sentiment in Latin America's bond market on Friday as miners and oil companies tumbled further.
The selling bias in Brazil continued as investors fretted about the health of the region's largest economy.
Sovereign debt widened another 8bp while Brazilian corporates were weaker anywhere between 10 to 25bp.
Brazil 2025s, were being quoted at 93.00-93.10, while the 2024s issued by state-owned oil company Petrobras were being spotted at a Treasury spread of 490bp-480bp - a good 60bp off this month's tights.
"We keep going wider, but we have created a lot of value over the last few days," said a New York-based trader. "It is pricing in a doomsday scenario and it is a bit overblown."
Weaker commodities and a strengthening dollar is also exacerbating downward price pressures, impacting bonds issued by miners as well as oil and gas companies.
Chilean copper giant Codelco - which had been expected to issue new debt this month - suffered a decent selloff over the last week on the back of slumping metals prices and concerns about Chinese growth.
It is a similar story for Peruvian tin miner Minsur, whose 2024s were closing about three points lower at 106.00. Continuación...