Market tone remains mixed as Peru, Ecuador announce deals
By Paul Kilby
NEW YORK, March 19 (IFR) - Peru and Ecuador pulled the trigger on bond trades on Thursday to take advantage of a narrowing issuance window as oil and currencies remained under pressure.
"Everything is around the same level, but I am not sure it will hold with oil and currencies down again," said Rodrigo Covian, a trader at Bulltick in Miami.
The Brazilian Real is back up at 3.28 against the dollar after dipping to 3.20 yesterday, while the Mexican peso was being quoted at 15.25, up from 15.08 yesterday. The Peruvian sol has also moved but less dramatically to hit 3.09 against the dollar.
Meanwhile, Brent was back below US$55 a barrel Thursday morning at US$54.52, while US crude had also slipped to US$42.90.
Brazilian oil company Petrobras was off earlier tights but largely holding on to yesterday's gains.
The company's short-dated paper maturing between 2016s and 2020 is offering yields between the high 7s and low 8s. On a spread basis the 2016s, 2024s and 2044s were trading at around the low 700s, 583bp and 575bp.
Ecuador meanwhile is targeting a shorter-than-expected five-year bond at a yield of 10.5% while Peru is carrying out a tap of its 5.625% 2050 dollar bond and sol-denominated 6.95% 2031 in combination with a tender-and-switch offer for dollar and local currency debt maturing between 2015 and 2025.
Leads BBVA, Deutsche Bank and Morgan Stanley are out with initial price thoughts of Treasuries plus 237.5bp area on the dollar tap and 7% area on the reopening of the sol denominated bond. Continuación...