LatAm credit advances amid positive tone
By Paul Kilby
NEW YORK, Feb 13 (IFR) - Progress in Greek debt negotiations, a UK court ruling on Argentina's bonds and the extended rally in oil prices made for a positive start Friday in the Latin American credit markets.
Brazilian credits continue to advance. Bonds issued by Petrobras rallied another 10bp-15bp this morning after oil breached the US$60 per barrel mark.
Meanwhile investors responded positively to news that capex cuts and asset sales are on the cards for the beleaguered state-owned oil company.
The long end of the Petrobras curve has flattened, with both the 2024s and 20244s trading at 520bp, while the 2016s are now being quoted at 500bp.
But traders are questioning whether the rally has legs, amid talk that this may be a good opportunity to reduce exposure to the credit, which is now just one notch above junk.
"Some accounts have concerns that Petrobras could be downgraded and are thinking about taking profits," said a trader.
Elsewhere in Brazil's corporate space, Banco do Brasil has rallied several points this week, with its 9% and 6.25% perps being bid at 84.00 and 70.00, respectively, the trader said.
Both New York and UK-law bonds issued by Argentina were up this morning after a London court ruled that English law applied to its euro-denominated debt under that jurisdiction. Continuación...