LATAM WRAP-Brazil leads region lower in ugly trading day
By Paul Kilby
NEW YORK, Sept 22 (IFR) - Latin America suffered another ugly day on Tuesday, as commodity producers and Brazilian credits led the region lower amid renewed concerns about Chinese growth.
Beleaguered Brazilian oil firm Petrobras and state-owned banks proved to be the clear underperformers as the Real hit record lows and investors ditched the region's largest economy.
Petrobras's benchmark 2024s were closing at around 71.50-72.50, marking a six-point drop since Friday. It was a similar story at the long end of its curve, where the 2044s, down about six points since last week, were at 66.50-67.50.
By day's end, however, traders reported some buying interest in quasi-sovereign credit, especially among longer-dated bonds, which could put a floor under the freefall in prices.
Financials were also buffeted by the uncertainties surrounding the government's ability to pass the fiscal measures needed to right Brazil's floundering economy.
Banco do Brasil's 9% perps have tumbled eight points since Friday to trade today at 60.25.
Meanwhile Moody's downgraded Brazilian mall operator General Shopping to B2 from B1 on Tuesday. The agency cited the company's "strained liquidity position" following its decision to defer payments on its 12% perp and tender for its 10% perps.
"There is uncertainty regarding the company's future financial flexibility and earnings power to address the accrual of deferred interest," Moody's said. Continuación...