(Refiles to add editor’s name)
By Davide Scigliuzzo
NEW YORK, March 25 (IFR) - Latin American credits largely withstood a softening in global market conditions on Wednesday, as US Treasuries and major stock indices sold off following an unexpected drop in US durable goods orders.
“The market is coming off a bit after opening very strong,” said a corporate bond trader in New York. “But most credits are still tighter (on the day).”
Notes issued by Brazilian state-run oil company Petrobras were among the outperformers. Its curve gave up some earlier gains but still ended the session some 11bp tighter in spreads terms.
Indeed, most investment-grade names ended about 4bp-10bp tighter on the day after holding firm against a weaker US Treasury market, where yields on the 10-year note rose 5bp to 1.93%.
Brazilian financials were in demand, with Banco do Brasil’s 2022s and 2023s both closing roughly a point higher at 92.5-93.0 and 97.5-98.5 respectively.
Among sovereigns, Argentine bonds barely budged despite the country’s Finance Minister Axel Kicillof questioning the legality of a US court ruling allowing Citigroup to process two upcoming payments on the country’s local law dollar bonds.
Argentina’s local-law Discount bonds were ending the session at 97.5-98.5, having lost half a point at most over the last couple of session, according to a second New York-based trader.
Discount and Par bonds issued under New York law were also little changed on the day, ending the session at 102.5-103.5 and 58.5-59.5 respectively.
The deal, which was designed to prevent Citigroup from losing its banking license in the country, will be reviewed by Argentina’s securities commission and central bank, Kicillof said, according to Reuters.
In primary markets, Colombia Telecomunicaciones (ColTel), brought to market a particularly rare single-B rated hybrid bond that will bolster its balance sheet under new accounting standards.
The US$500m perpetual non-call five bond priced at par to yield 8.5%, after orders swelled to over US$1.4bn. The notes were quoted at 99.5-100.0 in the gray market, according to a second trader in New York.
In Peru, Mexican media company TV Azteca is expected to bring to market a project bond related to the development of Peru’s fiber optic network as soon as this week. (Reporting by Davide Scigliuzzo; Editing by Paul Kilby)