Markets drift higher as YPF makes opportunistic tap
By Paul Kilby
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. Continuación...