LatAm credit take back some gains on profit-taking
By Paul Kilby
NEW YORK, April 7 (IFR) - Latin American credit markets were taking a breather Tuesday as crude gave back some gains and investors awaited further evidence that Brazilian oil company Petrobras would deliver its audited results in coming weeks.
Petrobras's 2024s and 2044s were both starting the day in the high 400s, or a touch tighter, while a rally in the sovereign had stalled somewhat as investors took some profits.
Brazil 2025s were being quoted at a mid-market price of around 99.60 versus 99.83 yesterday, but considerably higher than the 93.00 cash price quoted in mid March.
"The market believes (Petrobras's) financials are coming in the next week or two but it hasn't happened yet," said a New York based trader. "We have got to a place where people are scratching their heads. Brazil has recovered a lot, but where do we go from here?"
Spreads on bonds issued by miner Vale, for example, have been widening as iron ore prices slip, with its 4.375% 2022s quoted at 320bp this morning, 60bp wide to a recent tight of 260bp in March.
Meanwhile, the 2022s issued by Schahin continued to slide Tuesday and were quoted as low as 38.50-48.00.
This comes as oil names come under some renewed pressure as concerns that the potential lifting of sanctions in Iran will lead to more supply and lower crude prices. Brent was down about 70ct at US$57.42 a barrel earlier today, while US crude was following a similar trajectory downward to US$51.39 a barrel.
Despite that, traders have been reporting some reverse enquiry for state-owned Ecopetrol, which has watched the price on its 2025s steadily climb from a recent low of around 91.30 in mid-March to be quoted at a mid market price of 97.60 Tuesday. Continuación...