LatAm credit little-changed as investors focus on Greece
By Paul Kilby
NEW YORK, June 29 (IFR) - A break-down in Greek debt talks was having a marginal impact on LatAm credit spreads on Monday, but primary market activity is slow as a result.
By late morning bond prices were largely off their lows following an initial knee-jerk reaction to the imposition of capital controls in Greece ahead of tomorrow's payment deadline on debt owed to the IMF.
"At these levels we have customers willing to buy," said a New York based trader. "There is an expectation that any widening will be bought and that some sort of resolution (in Greece) will take place."
Other traders reported little buying activity amid very light flows. "The market is light and real-money really didn't do anything today," said a second trader. "It is really a reallocation of positions rather than buying."
Most participants are awaiting the outcome of a referendum on the Greek bailout proposals scheduled for July 5, and how the US high-grade market will respond to the latest new in Europe.
"Until they go to the referendum, I am not sure we will see much activity," said a DCM banker. "Everyone seems to be in wait-and-see mode."
For now, the visible pipeline for Latin American issuers remains small, though bankers say they have been preparing to launch deals following the July 4 holiday.
Yet while doubts remain about execution in the cross border markets, borrowers appear to have access to local debt financings, at least the larger blue-chip names. Continuación...