NEW YORK, Feb 17 (IFR) - Latin American credit markets were seeing a slow but tighter start Tuesday morning following a long holiday weekend in the US as investors clung to the hope that eurozone officials and Greece would reach a last-minute deal.
"I am surprised. The market is looking tighter," said a New York-based trader. "I was expecting to see a correction."
Spreads were largely grinding tighter, though traders were reporting very light liquidity for Latin America, where several countries are still celebrating Carnival this week.
The gradual recovery in oil prices remains a bright spot amid headlines about slower GDP growth in countries such as Peru and Colombia. Brent crude pierced US$62 yesterday to hit a 2015 high of US$62.57, according to Reuters.
Beleaguered Brazilian oil entity Petrobras was starting the day about 10bp tighter despite ongoing uncertainties about a widening corruption scandal. The company's 2016s, 2024s and 2044s were respectively spotted this morning in the high 400s, 510bp and 520bp.
Bonds issued by oil rich Venezuela were also well supported with its 12.75% 2022s being spotted at around 48.75-49.75, up about 50ct from Friday's levels.
"Prices have risen two to three points in some bonds without any local participation," Jorge Piedrahita, CEO of Torino Capital, wrote to clients this morning. "One has to wonder if they will sell when they get back."
Meanwhile, the City of Buenos Aires' recently minted 8.85% 2021s were also advancing in the secondary market to be quoted at 101.30-101.40, up a good point since they were priced last week at par.
This comes as primary activity shows little life amid expectations that few if any deals will price this week. "It is going to be quiet," said a syndicate manager. "It is a short week, it is the Lunar New Year in China and there are blackout periods."
Grupo Senda Autotransporte, a Mexican bus transportation company, has finished roadshows but has yet to emerge with bond details. Expected ratings are B/B (S&P/Fitch). CS and JP Morgan were named as active bookrunners, and BBVA passive on any possible trade.
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 the end of February.
Costa Rica has chosen Deutsche Bank and HSBC as lead managers on an up to US$1bn international bond sale that could take place as early as this month, market sources told IFR. (Reporting by Paul Kilby; Editing by Marc Carnegie)