LatAm credits underperform in bad news day for the region
By Paul Kilby
NEW YORK, May 27 (IFR) - LatAm credits underperformed on Wednesday as pessimism over Brazil's economic outlook and a Russian ban on its beef products weighed on the country's debt prices.
"We basically underperformed the rally in rates and equities," said a New York based trader. "The bid for duration was very weak despite the rates rally."
Yields on longer dated US Treasury shrunk Thursday on continued concerns over Greek debt negotiations, leaving the 30-year benchmark dropping to a two and a half week low to 2.87%.
The Brazilian sovereign's benchmark 2025 fell back to a mid-market price of around 98.75 on expectations the country suffered an economic contraction during the first quarter, setting the stage for more pain to come.
Brazilian meat producers also watched their bonds sink Wednesday following reports that Russia would ban imports from 10 of the country's processing plants.
The country's largest meat producer JBS's bonds suffered a one point drop on the news but its new 5.75% 10-year were still at 101.10, or point over where they priced last week.
Uncertainty over Brazilian economic performance has not stopped the country's issuers from planning bond deals.
Aircraft manufacturer Embraer has become the fifth Brazilian corporate to approach investors since Petrobras released its full-year results in late April. Continuación...