NEW YORK, April 14 (IFR) - News of a firm date to sign off on Petrobras’s audited results sparked a rally in Brazilian bonds on Tuesday and set a positive tone for the rest of Latin America’s credit markets.
Bond spreads for the Brazilian state-controlled oil company closed off their tights but some 10bp-20bp stronger on the day, with the 2024s and 2044s around 440bp-435bp and 455bp-450bp.
Petrobras said its board would meet on April 22 to approve 2014 audited financials, raising hopes it would meet covenant deadlines for full-year results and avoid a downgrade to junk.
“I wouldn’t say we are trading on optimism about Brazil but recovering from really bad expectations about Petrobras,” said Klaus Spielkamp, head of fixed-income sales at Bulltick. “(But) I guess it is all good for Brazil.”
Other Brazilian quasi-sovereigns and credits linked to Petrobras leapt in sympathy, including utility Eletrobras and Odebrecht bonds backed by drillship charters.
Eletrobras 2021s were ending the day a good point higher at 95.00-95.25, while Odebrecht’s drillship securities due 2022 were closing several points stronger at 80.00-80.50.
Traders also reported positive price action across Brazilian corporates, including Caixa, Banco do Brasil, Itau and JBS. The sovereign’s 2025s also pushed higher to end at 100.25-100.75.
The relief rally has cleared the air somewhat and set the stage for borrowers seeking to come to market as investors look to put money to work after a dearth of supply this year.
Traders are already reporting firm interest in BBVA Colombia’s Tier 2 offering as it wraps up roadshows this week.
“There are no new issues available in the market,” said Spielkamp. “This is a name everyone is comfortable with and there are not many bonds out of Colombia.”
Panama’s Global Bank meanwhile tapped its 5.125% 2019s for another US$150m on the back of a US$450m book. Led by Citigroup and Deutsche Bank, the reopening priced at 103.574 to yield 4.25%. Commerzbank and Mizuho acted as co-managers on the trade.
Mexican state-controlled oil outfit Pemex took advantage of record low rates in Europe to raise EUR2.25bn through a dual tranche offering after combined books reached some EUR5.7bn.
It sold a EUR1bn 1.875% seven-year at 99.320 to yield 1.98% or mid-swaps plus 165bp, and a EUR1.25bn 2.75% 12-year at 99.016 to yield 2.848% or mid-swaps plus 225bp.
ACI Airport Sudamerica, controlling shareholder of the concessionaire of Uruguay’s Carrasco airport, has mandated BAML and Nomura to arrange investor meetings.
The meetings continue in London and Los Angeles tomorrow. A potential senior secured 144A/Reg S deal backed by future dividends from a long-term airport concession contract may follow.
ACI Airport Sudamerica is controlled by Corporacion America Airports, which has 52 airports under management.
BBVA Colombia has hired BBVA Securities and Morgan Stanley to arrange investor meetings ahead of a potential US dollar-denominated Tier 2 subordinated bond offering. The meetings wrap up in New York tomorrow.
Pacific Rubiales, the largest private oil producer in Colombia, has kicked off investor meetings through Bank of America Merrill Lynch, Citigroup and HSBC.
The meetings continue in Boston tomorrow; Santiago on April 30; Los Angeles on May 4; and Miami on May 6. (Reporting by Paul Kilby Editing by Marc Carnegie)