LatAm credits see firm start as Mexico targets century bond
By Paul Kilby
NEW YORK, April 8 (IFR) - Latin American credits are seeing another firm start Wednesday as Mexico prepares to price EM's first-ever Century bond denominated in euros.
Brazilian banks, which had lagged earlier rallies, are proving to be the outperformers, with Banco do Brasil's 9% perps up another half a point this morning at 91.75-92.50 after a stellar climb over the last few weeks.
"The market is still firm and we are still seeing buying interest in the market," said a trader.
Bonds issued by Brazilian state-owned oil entity Petrobras are largely drifting amid some profit taking, but remain some 1-2bp tighter in spreads terms. The company's 2024s and 2044s are being quoted at 487bp-485bp and 495bp-485bp, respectively.
Meanwhile, troubled oil services company Schahin is also watching its 2022s recover a touch to hit 42.00-44.00 after plummeting about 20 points over the last few days on unconfirmed media reports that it was about to file for bankruptcy. Schahin declined to comment on the reports.
The latest price move comes despite S&P downgrading Schahin Oil & Gas Wednesday to CCC- from B- and warning that a possible default was on the horizon.
"The downgrade reflects our belief that without an unforeseen positive development in the next six months Schahin is likely to default," S&P noted.
The company has been trying to extend its maturity profile ahead of a US$460m loan payment due in October, but S&P warns that its funding options are shrinking during a tough time for the oil sector and a temporary ban on sister company Schahin Engenharia from doing business with Petrobras. Continuación...