11 de marzo de 2015 / 16:27 / en 3 años

Panama tests mixed market sentiment with 10-year bond

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.

Latin American and African telco Millicom’s new 10-year non-call five is trading well despite pricing on Tuesday at par to yield 6%, or 25bp tighter than initial price thoughts. It was being quoted earlier today at 100.25-100.40.

Panama’s move today was probably a result of this improved tone. Rated Baa2/BBB/BBB, it has a Treasuries plus 180bp area guidance out on its 10-year bond. Bank of America Merrill Lynch and Deutsche Bank are leads on the deal, which is expected to price today.

PIPELINE

Ecuador could return to the international capital markets with a new US dollar bond sale as soon as next week, as it seeks to plug a widening financing gap in the wake of falling oil prices.

Investor meetings, which took place in London on Monday and Boston on Tuesday, will move to Los Angeles today, San Francisco on Thursday and New York on Friday.

The country is looking to raise US$1bn, according to a source familiar with the transaction.

Peruvian state-controlled mortgage bank Fondo Mivivienda, rated BBB+ from both S&P and Fitch, has mandated Deutsche Bank and JP Morgan to organize a series of fixed-income investor meetings in Europe starting in London today.

The borrower will move on to Amsterdam on Thursday and Paris on Friday. The following week, it will meet investors in Frankfurt on March 16.

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. (Reporting By Paul Kilby; editing by Shankar Ramakrishnan)

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