Brazilian credits up on Petrobras hopes
By Davide Scigliuzzo
NEW YORK, April 14 (IFR) - Latin American credits began Tuesday mixed, with the Brazilian sovereign and Petrobras outperforming on hopes that the oil giant will publish audited financial statements this month.
Brazil's credit default swaps were quoted some 17bp tighter in early trading at 235bp mid-market, while cash bonds were up by one point, slightly underperforming, according to a sovereign bond trader in New York.
Spreads on Petrobras notes meanwhile were as much as 30bp tighter, underpinned by strong demand from retail accounts. The company's 2024s were spotted at 448bp-440bp, while the 2044s were quoted at 458bp-450bp.
But other sovereign credits in the region seemed to be struggling to catch up with the rally in US Treasuries, as the yield on the 10-year note tightened 7bp to 1.86%.
High-yielding Venezuela and Argentina saw their curves weaken slightly, as investors sought to take profits after a strong rally in recent days.
Venezuela's 2022s were quoted at the open at 51.50-52.50, while PDVSA's 8.5% 2017s were spotted at 75.50-76.00.
"Some prices are reaching the levels of early December, which we view as difficult to surpass without a catalyst," said Jorge Piedrahita, CEO of New York-based broker Torino Capital.
In primary markets, the overall firm backdrop has encouraged borrowers to press ahead with opportunistic new bond offerings. Continuación...