Brazil, Argentina take beating in volatile session
By Paul Kilby
NEW YORK, March 12 (IFR) - Brazil and Argentina were the focus of attention for Latin American credits Thursday, as bonds from both sovereigns took a beating in a volatile session.
More downgrades for Brazilian companies connected to the corruption scandal surrounding Petrobras, and contradictory reports over the government's willingness to back financing for the oil company, created more uncertainty on the buy-side.
"We are at the lows and wides of the day," said a New York-based trader.
"It feels really bad in Brazil. Real money is looking to get out and we are seeing some capitulation from crossover accounts."
Petrobras 2024s and 2044s were closing about 18bp and 15bp wider at 534p-525bp and 534bp-524bp, while the Real hit a new 10-year high of 3.16 against the dollar.
Downgrades also pressured debt prices on rig-backed bonds issued by companies chartering to Petrobras.
Fitch downgraded Schahin's senior secured 2023s to BB- from BB+, Lancer Finance Company's 2016s to BB+ from BBB-, and QGOG Atlantic/Alaska 2019s to BB+ from BBB-.
The rating agency cited concerns that pressure to reduce capex spending at Petrobras may jeopardize charter agreements with these and other offshore oil companies. Continuación...