LATAM WRAP-Cautious tone prevails in LatAm credit market
By Paul Kilby
NEW YORK, Oct 14 (IFR) - Latin American borrowers remained on the sidelines with concerns about Brazil continuing to keep sentiment subdued and investors averse to taking on more risk.
The 2024s issued by Brazilian oil company Petrobras were drifting lower to be quoted at 78.00, while the 2025s issued by the Brazilian sovereign were back below 90.00.
For now, investors are taking a hands-off approach to Brazil amid heightened talk about possible impeachment proceedings against President Dilma Rousseff.
A Supreme Court ruling on Tuesday prevented opposition parties from forcing a vote to open impeachment proceedings, but house speaker Eduardo Cunha is still analyzing requests to move forward.
"People are looking at how this matter develops to make up their minds about whether they are positive or negative on Brazil," said a trader.
The risk-off tone has extended to the rest of the market as crude prices slipped again on Wednesday and the yield on the 10-year US Treasury dropped below 2% on global growth concerns.
"It seems like the market is still afraid to show prices," said the trader. "People are afraid we will revert to where we fell two weeks ago."
Despite that backdrop, some credits were creeping higher, including Arcos Dorados, the regional operator and franchisee of McDonald's. Continuación...