LatAm borrowers on hold as Brexit fears roil market

jueves 16 de junio de 2016 13:13 GYT

By Paul Kilby

NEW YORK, June 16 (IFR) - Latin America's primary bond markets have ground to a halt this week as fears over a possible UK exit from the European Union send bond spreads wider and stop investors from taking on risk.

Argentina's Province of Salta and Mexican property developer GICSA are thought to be waiting for better conditions after finishing roadshows on Wednesday.

That is seen as a wise move given the state of the market.

Relatively dovish comments from Federal Reserve Chair Janet Yellen failed to lift market sentiment, as investors are focused on polls showing a majority favoring a UK exit from the EU.

"It is a completely different environment from yesterday," said Klaus Spielkamp, head of fixed-income sales at Bulltick.

"Yesterday some people were looking to close shorts and place bets on the upside, but even they are closing positions today to stay lighter ahead of the Brexit vote."

Yields on the 10-year US Treasury have shrunk to 1.568% for the first time since late 2012, as investors pile into safe-haven assets in preparation for potential volatility ahead.

Issuers are now deciding whether to move ahead before the vote next Thursday, or take the chance that Britain will ultimately decide to stay in Europe and print on the back of the relief rally that would likely ensue.   Continuación...