NEW YORK, Feb 9 (IFR) - Spillover from Greece and Ukraine has left Latin American credit markets suffering from a dose of risk aversion on Monday with Brazilian oil company Petrobras leading bond prices lower.
This combined with softer economic data out of China and another dire forecast over growth prospects in the region’s largest economy - a Central Bank poll had economists cutting Brazilian GDP predictions to zero for 2015, according to Reuters - have left investors in a cautious mood.
An extension of the rally in crude prices continues to be the bright spot for EM oil names. Still it was not enough to lift Petrobras bonds, which are up to 10bp wider after markets expressed disappointment in the appointment of Aldemir Bendine as the company’s new CEO.
As CEO of Banco do Brasil, Bendine is seen qualified to run a state-owned entity, but his lack of expertise in the oil sector has given investors pause.
President Dilma Rousseff has also fallen back on Banco do Brasil to find Petrobras’ new CFO, Ivan Monteiro, who is currently vice president of financial management and investor relations at the government owned bank.
Petrobas bonds were opening 5-12bp wider this morning with the 2016s, 2014 and 2044s being quoted at 550bp-525bp, 568bp-558bp and 575bp-565bp, according to a trader.
“It feels like investors still don’t have a lot of conviction about the market and are coming into trades for a quick flip,” said a senior banker.
The new 30-year and 10-year bond issued by Chilean retailer Cencosud were around reoffer Monday morning at 99.65 and 99.375.
In contrast Argentina oil company YPFs’s 8.75% 2024s were bid at around par after being tapped for US$325m last week at 99.833. Its 2018s were at 102.00 versus a retap price of 101.194.
“Argentina was one of the best performers last year and people are underweight,” said the banker. “YPF has low leverage and people feel that there is light at the end of the tunnel.”
PIPELINE The City of Buenos Aires announced a series of investor meetings ahead of a potential 144A/Reg S bond issue. BAML, HSBC and JP Morgan are the lead managers. Senior officials met investors in London and New York on Friday and now will head to Boston and Los Angeles on Monday, and back to New York on Tuesday.
Grupo Senda Autotransporte, a Mexican bus transportation company, wrapped up investor meetings ahead of a possible USD 144A/Reg S bond offering. Expected ratings are B/B (S&P; Fitch).
CS and JP Morgan are active bookrunners, and BBVA passive.
Mexican media company TV Azteca is bringing to market a rare project bond related to the development of the Andean country’s fiber optic network. Pricing is expected toward end of February.
Bankers are awaiting a mandate decision on an up to USD1bn 144A/Reg S bond offering from Costa Rica after the sovereign sent out a request for proposals last month. (Reporting By Paul Kilby; Editing by Shankar Ramakrishnan)