Mixed start for Latin America credit before FOMC
By Paul Kilby
NEW YORK, March 18 (IFR) - LatAm credit markets were off to a mixed start Wednesday as investors squared positions ahead of the FOMC statement later in the day.
In the absence of any strong trading activity, spreads were largely drifting wider as crude prices fell again this morning while US Treasuries extended recent gains.
One of the few exceptions was Brazil's state-controlled oil company Petrobras, whose curve is opening some 10bp tighter after another day of dramatic widening Tuesday.
Its 2016s, 2024s and 2044s were being quoted at 750bp, 596bp and 575bp, respectively.
"Yesterday some of their bonds widened 80bp, so if they come in 10bp it makes sense," said a New York-based trader.
Elsewhere in the oil space, Pacific Rubiales's bonds were being marked down following a tumble this week after it decided not to extend a contract to develop its Rubiales field in Colombia.
News this morning that the company would suspend dividend payments and had agreed to relax terms on its debt did little to help bond prices.
"(The news) isn't offsetting weakness elsewhere," said another trader. Continuación...