Brazilian credits suffer further slump in prices
By Paul Kilby
NEW YORK, March 17 (IFR) - Brazil credits were suffering another bout of selling Tuesday morning, with the rest of the region's bond markets following them lower as crude prices slump.
"It is very bad," said a New York-based trader focused on Brazil. "We are about 25bp-50bp wider. We are seeing some capitulation, and no one is bidding paper."
The increasingly negative mood in Brazil has now spread to other credits not connected to the corruption scandal at state-owned oil entity Petrobras.
Brazilian beef name Marfrig, steel maker Gerdau and BR Foods, for example, have all watched their bond prices sink in recent days.
"People feel that things are not getting better, and it is hard to see any signs that (the government) will get a handle on this anytime soon," said a senior DCM banker.
BR Foods 2024s were being quoted at 95.00 this morning, marking a good two point drop since the beginning of last week.
It is a similar story for 2024s issued by steelmaker Gerdau, which were being spotted at 96.25 today versus the 99.50-100 seen last week. Marfrig's 2020s, meanwhile, were being bid at 93.25 after trading Friday at 96.75.
Spreads on Petrobras bonds also continue to gap out, further inverting its curve. Its 2016s, 2024s and 2044s were being quoted this morning at 725bp-700bp, 610bp-595p and 600bp-585bp. Continuación...