Panama tests mixed market sentiment with 10-year bond
By Paul Kilby
NEW YORK, March 11 (IFR) - A widening corruption probe prompted a selloff in Brazilian credits but a better tone in the rest of the region encouraged Republic of Panama to test the waters with a 10-year bond on Wednesday.
Brazil's Braskem became the latest victim of the corruption investigation at Petrobras after local reports today connected the petrochemical company to the scandal.
Earlier today, the company's 2021s were being bid at 90 but offered at 97.00.
"Markets have learnt to sell first and ask questions later in Brazil," said a New York based trader explaining the dramatic price swings. "I wouldn't want to own an investment bank in Brazil."
Market offered a mixed reaction to a government compromise on tax hikes yesterday as the new Finance Minister Joaquim Levy tries to push through fiscal measures designed to get the economy back on track.
The deal opens the possibility of the passage of further measures but underscores the difficulties the government faces in implementing its economic agenda at a time when the Petrobras investigation is antagonizing members of Congress.
Still the situation is not all that grim with newly issued bonds trading well in secondary and sell-offs are being followed by some opportunistic buying.
BTG Pactual's bonds, for example, were recovering a touch after a precipitous slide earlier this week. The investment bank's 2020s were inching higher on local buying to be quoted at 87.50-88.00 but were still far off the 90.70 seen yesterday. Continuación...