LATAM WRAP-Petrobras bonds lead LatAm credits higher

lunes 5 de octubre de 2015 15:39 GYT

By Paul Kilby

NEW YORK, Oct 5 (IFR) - The short-end of the Petrobras bond curve, which faced the brunt of a recent sell-off, continued to strengthen on Monday and gave a solid boost to LatAm credit markets.

The 2017s and 2019s issued by the Brazilian state-owned oil company were about 50bp tighter versus Friday, according to a New York based trader.

Today's rally extended last week's jump in prices following Petrobras's decision to hike fuel prices and a reshuffling of President Dilma Rousseff's cabinet - a move that was seen as easing the way for the passage of vital fiscal measures.

"It didn't make sense where Petrobras was trading," said the trader. "Real money had until September 31 to get rid of those bonds so there was some overshooting."

The rapid recovery in the beleaguered oil company's bonds has raised speculation that it could take an opportunity to raise funding in the dollars market.

"Two more days of a rally like this and I wouldn't be surprised if Petrobras announces a deal," the trader said. "If they announced a 30-year at 10% people would jump."

The better tone has raised hopes that borrowers waiting in the pipeline may try their luck, though bankers think a few more days of stability are required.

"Borrowers have to get comfortable that this is not a one-day thing," said a syndicate banker. "Spreads are also still wider so issuers will have to wrap their heads around where things are trading and higher new issue premiums."   Continuación...