LatAm credit markets drift in well-supported market

jueves 16 de abril de 2015 10:17 GYT

By Paul Kilby

NEW YORK, April 16 (IFR) - Latin American credit prices were flat to a touch lower but remain well supported with 10-year US Treasury yields around 1.88% and crude prices showed signs of stabilizing.

"Oil is lower but it is still above US$55, which is positive for some names," said Rodrigo Covian, head of fixed-income at Bulltick.

Brent hit a 2015 high earlier Thursday morning at US$63.29 a barrel on expectations the supply-demand imbalance that sent crude tumbling earlier this year may be finding a better equilibrium.

Both Brent and US crude subsequently gave back some gains later in the session to trade at US$62.27 and US$55.29, but remain near recent highs.

Colombian credits were weaker with state-owned oil company Ecopetrol's bond prices slipping following the approval for the issuance of up to US$3.175bn in bonds. The 2025s were being quoted this morning some 50ct lower at 97.375.

Meanwhile, Pacific Rubiales, which is currently meeting investors on an extensive global roadshow, is also watching its 2025 bond prices move south, albeit only slightly, to 61.00.

Elsewhere in the oil space, investors have largely shrugged off S&P's decision yesterday to downgrade Petroleum Company of Trinidad & Tobago (Petrotrin) to BB+ from BBB-. The company's 2019s were being quoted at a mid-market price of around 121.00, marking a two point climb since Monday.

Meanwhile, the primary market continues to show signs of life with BBVA Colombia emerging with initial price thoughts of Treasuries plus 325bp area on the sale of US$300m in 10-year subordinated Tier II notes through bookrunners BBVA and Morgan Stanley. Expected ratings on the notes are Baa3/BBB by Moody's and Fitch.   Continuación...