LatAm credits start wider as risk aversion weighs

lunes 9 de febrero de 2015 11:38 GYT

By Paul Kilby

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.   Continuación...