NEW YORK, April 17 (IFR) - Latin American credit markets were off to a weaker start on Friday, as a negative tone across global markets caused prices to drop slightly across the region.
Spreads on most of the region’s corporate bonds opened between 2bp and 8bp wider compared to Thursday’s close, according to a corporate bond trader in New York.
Bonds of Brazilian state-run oil company Petrobras were also weaker, with the 2024s and 2044s quoted at spreads of 475bp-465bp and 495bp-485bp respectively in early trading.
“The market is a little weaker but not blowing up,” said a second corporate bond trader in New York.
Among sovereigns, Venezuelan bonds opened between a quarter and half a point lower, as Brent prices hovered just above US$64 a barrel, within reach of their record high for the year.
Venezuela’s 2022s were quoted at 51.25-52.25 in early trading, while PDVSA’s 8.5% 2017s were spotted at 74.0-74.5, according to a New York-based broker.
Meanwhile, emerging market dedicated bond funds experienced US$613m of inflows in the week ended April 15, their largest in seven weeks, according to EPFR data quoted by UniCredit.
Confirming a trend seen in previous weeks, investors continued to pull money out of local currency funds - which recorded weekly outflows of US$246m - and increased their exposure to hard currency funds - which recorded inflows of US$637m. Blend currency funds saw weekly inflows worth USD223m.
“The rotation from EM local-bond funds into EM hard-currency bond funds continues, and we think the trend will stay in place,” UniCredit strategist Martin Rea wrote in a note to clients.
So far this year, investors have pulled US$2.7bn out of local currency EM bond funds, while hard and blend currency funds have recorded inflows of US$2.2bn and US$1bn respectively.
Banco de los Trabajadores (Bantrab) will hit the road next week to market a possible subordinated debt offering through Deutsche Bank. The Guatemalan bank, which focuses on payroll lending to public sector employees, will be in Santiago on April 20, in Switzerland on April 22, in New York on April 23 and in Miami on April 24. The bank carries corporate ratings of Ba3/BB- by Moody’s and Fitch.
ACI Airport Sudamerica, controlling shareholder of the concessionaire of Uruguay’s Carrasco airport, has mandated Bank of America Merrill Lynch and Nomura to arrange investor meetings, which finished on Wednesday in London and Los Angeles.
A potential senior secured 144A/Reg S deal backed by future dividends from a long-term airport concession contract may follow.
Empresa Electrica Guacolda S.A. (Guacolda) has kicked off roadshows as it markets a senior unsecured 144A/RegS USD bond. The borrower mandated Citigroup, GS and Itau as global coordinators while Scotiabank is joint bookrunner.
The company is in Santiago and London today and will head to Los Angeles on April 20, New York on April 21 and Boston and New York on April 22. Guacolda is owned 50% plus 1 share by AES Gener (Baa3/BBB-/BBB-), while the remainder is held by infrastructure fund Global Infrastructure Partners. Expected ratings are BBB-/BBB-.
Pacific Rubiales, the largest private oil producer in Colombia, has kicked off a series of investor meetings through Bank of America Merrill Lynch, Citigroup and HSBC.
The company will head to Santiago on April 30, Los Angeles on May 4 and Miami on May 6. (Reporting by Davide Scigliuzzo; Edited by Paul Kilby)