NEW YORK, March 19 (IFR) - New bond deals from Ecuador and Peru stole the spotlight Thursday in a mixed session for a Latin American credit market that is still under pressure from falling crude prices.
"The market was mixed depending on the names you look at," said a corporate bond trader in New York. "Petrobras was 10bp wider and we saw sellers of some second-tier Brazilian banks."
Brazilian beef companies such as Marfrig and JBS, however, were outperforming, with their bonds ending the day as much as 1.5 points higher in price.
Marfrig's 2020s were last spotted at a cash price of around 92, while JBS's 2024s were quoted at 101.5, said the trader.
Among sovereigns, Venezuela bonds received a boost on news that the country was poised to receive US$10bn of financing from China.
A senior official at state-owned oil company PDVSA told Reuters that the financing would comprise the renewal of a US$5bn bilateral deal and a new US$5bn loan linked to contracts with Chinese companies seeking to develop local oil fields.
"We were assuming a rollover of the Tranche B for about US$4.5bn, so there are about US$5bn additional," said Jorge Piedrahita, CEO of brokerage Torino Capital. "No wonder that local demand has been more aggressive than usual this week."
Venezuela's 2022 notes ended the session a point and a half higher in price at 44.25-45.25, while state-owned oil company PDVSA's 8.5% 2017 rose by nearly three points to 65.0-65.5.
In primary markets, Ecuador felt the brunt of falling oil prices as it brought to markets its second international bond deal since its 2008 default.
The country was forced to target a shorter maturity, a smaller size and a higher yield than originally expected, eventually pricing a US$750m five-year note at par to yield 10.5%.
Elsewhere in the region, Peru priced a US$545m tap of its 5.625% 2050 at 115.378 to yield 4.728% or Treasuries plus 220bp, the tight end of guidance of 225bp (plus/minus 5bp) and well inside initial talk of plus 237.5bp area.
By late afternoon, markets were still waiting for Peru to price a sol-denominated 2031 after leads BBVA, Deutsche Bank and Morgan Stanley set price guidance on the deal at 6.875%-7.000%.
The transactions were launched in combination with a tender-and-switch offer for dollar and local currency debt maturing between 2015 and 2025.
Colombia Telecomunicaciones (ColTel), Colombia's second-largest telecommunications company, has hired BBVA and HSBC as structuring advisors as well as joint bookrunners along with Citigroup and Credit Suisse to arrange a series of investor meetings in the US, Europe and Asia.
A US dollar-denominated 144A/Reg S hybrid bond transaction may follow. The issuer is rated BB/BB, while the hybrid bond is expected to be rated B+/B. ColTel is 70% owned by Spain's Telefonica S.A. and 30% owned by the Republic of Colombia. Meetings kicked off this week and will continue until March 24.
Peruvian state-controlled mortgage bank Fondo Mivivienda, rated BBB+ by both S&P and Fitch, wrapped up investor meetings this week through leads Deutsche Bank and JP Morgan.
Mexican media company TV Azteca is expected to bring to market a rare project bond related to the development of the Andean country's fiber optic network.
Reporting by Davide Scigliuzzo; Editing by Paul Kilby