Ecopetrol breaks silence in risk-on day for LatAm markets

martes 23 de junio de 2015 16:14 GYT

By Paul Kilby

NEW YORK, June 23 (IFR) - A recovery in LatAm debt spreads opened a window for Colombia's Ecopetrol on Tuesday when it printed a US$1.5bn 11-year bond - the state-owned oil company's first debt issue in nine months.

Optimism over Greek debt talks spurred risk buying on Tuesday, leaving LatAm debt spreads tightening against a weaker US Treasury market, and also benefiting the oil credit that has received a battering in secondary this year.

"We are trading well today and are tighter across most credit spreads," said a New York based trader focused on Latin American credits. "I guess most people think a Greek deal will get done or they will kick the can down the road."

Even with Heinz's jumbo US$10bn multi-tranche deal in the US high-grade market, Ecopetrol came on a relatively quiet day in the primary market, leaving the runway open for the Colombian borrower.

The deal, which saw books peak at around US$4.7bn, marked the issuer's first such foray since this year's dramatic dip in crude prices left investors fretting about the quasi-sovereign borrower.

Indeed, the company's bond prices have been on a roller-coaster ride since November last year.

Its 4.125% 2025s hit a 91 cent trough several times over that period, only to bounce to a year-to-date high of 98.125 and then tip back to around 92.50-93.00 just prior to the deal's announcement.

Those low secondary levels essentially disqualified the existing 10-year from being retapped and hence the borrower opted for a new 11-year benchmark instead.   Continuación...