LatAm credit markets suffer softer session
By Paul Kilby
NEW YORK, April 17 (IFR) - Latin American credit markets were largely ending softer Friday as broader global markets sank on concerns about new Chinese regulations and the outcome of Greek debt negotiations.
"It wasn't a good day for fixed-income markets," said a sovereign debt trader. "We saw mostly sellers and not much liquidity."
With broader markets selling off, investors who focus on Latin America have been taking risk off the table ahead of a Petrobras board meeting on Wednesday, when the company is expected to sign off on overdue audited results.
Petrobras and other Brazilian credits have enjoyed a considerable run-up of late. But further delays in the release of the financials could scare investors who have been betting the company would soon eliminate the risk of a covenant breach.
"I hope these guys release results," said the trader. "If they don't, it could get ugly."
Brazil 2025s were closing at 99.50, or a good point lower on the week, while bonds issued by Petrobras continued to give back gains. Its 2024s and 2044s were closing some 10bp wider at around 465bp-460bp and 490bp-485bp, respectively.
Elsewhere in the Brazilian corporate space, credits that have lagged the recent rally were holding up well. Spreads on miner Vale's 2022s were steady at 315bp despite some volatility in the US Treasury market, where yields on the 10-year jumped as high as 1.91% Friday on inflation concerns before falling back to 1.84%.
In other parts of the region, BBVA Colombia's new 10-year subordinated Tier 2 bond was outperforming, climbing to around 100.75-100.80 after pricing yesterday at 99.914 to yield 4.885%, or Treasuries plus 300bp, on the back of some US$2.7bn in demand. Continuación...