LatAm credits start firmer as Colombia taps long end

lunes 23 de marzo de 2015 09:51 GYT

By Davide Scigliuzzo

NEW YORK, March 23 (IFR) - Latin American credits continued to grind tighter Monday, with a dovish statement from the Fed last week still encouraging market participants to put money to work.

In spite of the weakness in oil and European equities, CDS on LatAm sovereigns were quoted between 3bp and 6bp tighter in early trading, while cash bonds were also better bid.

"The buying continues," said a corporate bond trader in New York. "On a relative basis we are still cheap to US high-grade and to Europe."

Argentine bonds were expected to remain well supported after a US judge allowed Citigroup - the custodian on some US dollar-denominated Argentine-law bonds - to process coupon payments on the notes when they come due on March 31 and June 30.

Argentina's New York-law Discount bonds opened on Monday at a cash price of 103.50-104.0, while Par notes were quoted at 59.25-59.75, according to a New York broker.

In primary markets, the firmer tone has encouraged Colombia to follow in the footsteps of other sovereigns and raise funds at the long end of its curve.

Colombia has set initial price thoughts of 265bp area over US Treasuries for a maximum US$1bn tap of its 2045s, which would bring the total size to up to US$2.5bn.

Based on the closing price of 101.0-101.5 Friday, equivalent to a G-spread of around 244bp-241bp, the tap is seen offering an initial concession of 21bp-24bp, according to the trader.   Continuación...