LatAm rallies on Petrobras results, higher oil prices

jueves 23 de abril de 2015 17:50 GYT

By Paul Kilby

NEW YORK, April 23 (IFR) - Rallying US stock markets, higher oil prices and optimism over embattled oil company Petrobras all helped to lift LatAm credit prices higher on Thursday.

Improving sentiment proved fortuitous for both Argentine oil company YPF and Chilean utility Guacolda which benefited from multi billion dollar order books for their bonds today.

This comes as Brazilian corporates, including names embroiled in Petrobras's corruption scandal, all rallied as markets breathed a sigh of relief over the release of the oil company's results late Wednesday.

Oil names also received a boost as crude prices hit 2015 highs Thursday amid the ongoing conflict in Yemen. Brent reached US$64.85 a barrel, while US crude jumped to US$58.02.

Petrobras's curve was ending the day tighter with the benchmark 2024s closing some 25bp narrower at 420bp-410bp.

Market participants remain split over whether the current rally has legs given the hurdles Petrobras faces in the months ahead.

"It still faces challenges and it is not clear to me if Petrobras will tighten much from here," said Jorge Piedrahita, CEO of broker Torino Capital.

This comes after Argentina's YPF generated a close to US$5bn book, allowing it to upsize the 10-year bond sale to US$1.5bn and price 3/8 of a point tighter to initial talk of 9% area.   Continuación...