Post-Fed bounce in debt prices raises issuance hopes
By Paul Kilby
NEW YORK, June 17 (IFR) - A positive reaction to the Fed's statement is set to inject life into LatAm primary markets with utility AES Panama expected to be the first off the blocks after ending roadshows on Wednesday.
The yield on the 10-year US Treasury settled back down to around 2.30% after hitting close to 2.50% last week in response to the Fed statement.
Traders were reporting good two-way flow, with recently minted LatAm deals putting in varying performances.
"People still expect a rate hike this year, but the Fed statement was perceived as a dovish statement and that helps emerging markets," said a syndicate manager.
Salvadoran bank Banco Agricola's new 2020 enjoyed positive price action, hitting 101.85-102.15 today after pricing last week at par.
Some traders are seeing more upside for the credit given that secondary yields are still at 6.25% versus 4.60% on a subordinated 2020 issued by its owner Bancolombia.
"Some people prefer not to be involved in El Salvador, but if you look at Agricola's relationship with Bancolombia, there is still room to tighten," said Klaus Spielkamp, head of fixed-income sales at Bulltick.
Mexican state-owned utility CFE's new 30-year lost some gains to trade at 100.25-100.75, but is still above reoffer of 99.146. Continuación...