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NEW YORK, April 22 (IFR) - Market focus remained firmly on upcoming Petrobras results and Argentina's latest market foray as Latin America credits drifted higher Wednesday morning.
Bonds issued by Brazilian oil company Petrobras were flat with the 2024s being quoted at a spread of 450bp as investors braced for the much anticipated release of audited financial results after the market close today.
Investors are largely keeping their powder dry in what remains a vulnerable Brazilian credit market given that any bad news could spark a sell-off in Petrobras debt.
"Clearly we have rallied a lot so I hope it is not a buy the rumor and sell the news (situation)," said a New York based trader.
If Petrobras results do please investors, bankers are anticipating the door to Brazilian bond issuance could open shortly, bringing the first debt deals out of that country this year.
"Petrobras could open the door and we could see stuff out of Brazil as soon as next week," said one syndicate manager.
Meanwhile, Argentina has almost tripled the size of its local bond sale of Bonar 2024s to US$1.416bn from US$500m on the back of around US$1.879bn in demand. The news sent the bonds up a point this morning to hit 104.00-104.50 despite news that holdout investor NML has been questioning Deutsche Bank's involvement in the local law offering.
"While the issue is positive in terms of Argentina's hard currency reserves, capital market participation, and ability to meet existing debt obligations, there is still a possibility the holdouts will attempt to block payments on the 24s as well," wrote a broker this morning.
Argentina's oil company YPF has capitalized on the positive sentiment to bring a new 10-year benchmark bond today with leads Bank of America and Credit Suisse sounding out accounts with IPTs of 9% area.
Elsewhere, Southern Copper's new 10 and 30-year bonds have given back some gains and were trading at around reoffer spreads of 205bp and 340bp, respectively.
Markets are anticipating more supply this week as Guatemalan bank Bantrab, ACI Airport Sudamerica, and Chilean utility Guacolda wrap up roadshows this week.
Banco de los Trabajadores (Bantrab) will hit the road next week to market a possible subordinated debt offering through Deutsche Bank.
The Guatemalan bank, which focuses on payroll-lending to public sector employees, is approaching investors with an up to US$100m 10-year subordinated loan participation notes, which are being recognized as Tier 2 capital by local regulators.
It is in Switzerland on April 22, New York on the 23rd and Miami on the 24th. The bank carries corporate ratings of Ba3/BB- by Moody's and Fitch.
ACI Airport Sudamerica, controlling shareholder of the concessionaire of Uruguay's Carrasco airport, mandated Bank of America Merrill Lynch and Nomura for investor meetings that concluded last week in London and Los Angeles.
A potential senior secured 144A/Reg S deal backed by future dividends from a long-term airport concession contract may follow.
Empresa Electrica Guacolda S.A. (Guacolda) has kicked off roadshows as it markets a senior unsecured 144A/Reg S USD bond. The borrower mandated Citigroup, GS and Itau as global coordinators, while Scotiabank is joint bookrunner.
The company is marketing a US$500m 10-year bullet bond. Proceeds from the bonds, and a five-year amortizing loan are going to refinancing the company's outstanding debt.
It is wrapping up roadshows in New York today. Guacolda is owned 50% plus 1 share by AES Gener (Baa3/BBB-/BBB-), while the remainder is held by infrastructure fund Global Infrastructure Partners. Expected ratings are BBB-/BBB-.
Pacific Rubiales, the largest private oil producer in Colombia, has kicked off investor meetings through Bank of America Merrill Lynch, Citigroup and HSBC. The company heads to Santiago on April 30, Los Angeles on May 4 and Miami on May 6. (Reporting by Paul Kilby; Editing by Natalie Harrison)