LatAm sees profit-taking on supply, Treasury concerns
By Paul Kilby
NEW YORK, June 3 (IFR) - Latin American bonds saw tighter spreads but weaker prices on Wednesday as investors took profits in anticipation of more supply ahead.
A back-up in US rates following the solid ADP jobs report also weighed on the region, though debt prices held up despite US Treasury yields hitting seven-month highs.
Meanwhile more LatAm borrowers moved ahead with bond trades.
Salvadoran bank Banco Agricola and Brazilian telco Oi joined a crowded pipeline following Petrobras's blowout Century bond on Monday and Buenos Aires province's new six-year yesterday.
"My biggest fear for a sell-off was more supply and now we are starting to see more supply," said a New York-based trader.
"A bunch of companies are coming to market, so people are a little cautious."
After a spike in trading on Tuesday, the new Petrobras 100-year saw its secondary volumes drop today. But spreads were closing some 5bp tighter at 520bp, or about 30bp inside pricing.
It was a similar story along the Brazilian state-controlled oil company's curve, where the 2024s were being quoted at 405bp. Continuación...