Brazil rallies as Petrobras fixes date for results
By Paul Kilby
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. Continuación...