More LatAm borrowers emerge in strong market
By Paul Kilby
NEW YORK, April 27 (IFR) - EM investors shrugged off worries about Greek debt negotiations and were back in risk-on mode on Monday, sending LatAm credit spreads tighter and bringing more borrowers out of the woodwork.
"Europe was a bit weaker, but there is strength in Latin America at the open," said a New York-based trader. "People keep getting more comfortable about putting money to work in Brazil, and Vale is the bond of choice today."
The Brazilian miner watched its bonds tighten another 10bp across the curve on the back of stronger iron ore prices, though some traders think the rally may have extended too far.
"At these levels it has become a massive sell, especially the belly of the curve," said a second trader. "There has been a short squeeze from crossover accounts."
The company's 2022s were being quoted at around 260bp, while its 2042s were spotted at 440bp-430bp.
Petrobras debt was also inching tighter as a relief rally sent its bonds and other Brazilian corporates tighter after the embattled oil company finally released full-year audited results last week.
This comes after an active week in the primary markets which saw some US$5.5bn in new supply from an eclectic group of borrowers including Argentina, oil company YPF, Chilean utility Guacolda, Paraguay and miner Southern Copper.
The Bonar 2024s, which Argentina tapped last week at 103.00, were largely unchanged Monday morning at 104.25-104.75. Continuación...