LatAm credits drift in range amidst rate volatility

viernes 5 de junio de 2015 14:45 GYT

By Paul Kilby

NEW YORK, June 5 (IFR) - Latin America credits were largely ending flat to slightly softer on Friday after a busy week in the primary market, which saw close to US$4.5bn in new supply.

Rate volatility continues to weigh on sentiment, and another spike in US yields today didn't help.

A strong non-farm payrolls numbers sent the yield on the 10-year US Treasury as high as 2.44% amid expectations that the Fed could tighten monetary policy sooner rather than later.

A renewed surge in supply has also weakened the backdrop somewhat for the region's debt prices during a week that saw more outflows out of EM debt funds.

Sub-investment grades, which are more immune to Treasury volatility, were some of the better performers Friday. LatAm Airlines' new 2020s jumped to 101.00 after pricing yesterday at par to yield 7.25%, flat to initial price talk.

Bonds issued by Petrobras, which shocked markets earlier this week by coming with a rare Century bond, were largely drifting amid light flows.

The new 100-year bond was being quoted at 525bp after hitting an earlier wide of 528bp, leaving it essentially flat to where it closed on Thursday.

Real money accounts were seen selling their 30-year holdings in Petrobras to go into the longer bond for a nice yield pick-up, said one trader.   Continuación...