NEW YORK, Dec 4 (IFR) - LatAm credit put in a mixed performance on Friday as investors focused on BTG Pactual’s fundraising efforts as well as potential fallout from Venezuela’s elections this weekend.
BTG Pactual bonds were up several points on news that the embattled investment bank had accessed a R$6bn(US$1.6bn) credit line from the country’s deposit guarantee fund.
Yet while such credit lines provide the bank with needed liquidity, the move also underscored the difficulties the bank faces in coming weeks.
“This is not an encouraging message; it shows they are under stress,” said Jorge Piedrahita, CEO of broker Torino Capital. “(People) have been reassessing their exposure to BTG.”
The bank’s senior 2020s were being quoted at 67.00 on Friday, up about 12 points on the day but still multiple points weaker than the 73.00-75.00 seen on Monday.
This comes after a rollercoaster week for Brazilian asset prices, as investors reassess country risk in the face of impeachment proceedings against President Dilma Rousseff.
Efforts by the president’s allies to prevent impeachment failed on Friday, when the Supreme Court rejected appeals to stop the process.
“There is a lack of buyers,” said a New York-based trader. “We continue to see people reduce exposure to Brazil. There is no tolerance to take risk there.”
The 2024s issued by oil company Petrobras were down about 1/2 a point to trade at 76.60-77.50, while the short end of the miner Vale’s curve was some 20bp wider, he said.
Elsewhere, Venezuela bond prices were ending lower on the week as investors fret about Sunday’s parliamentary elections despite strong support in the polls for the opposition.
Venezuela’s 9.25% 2027s were trading at 42.25-42.75 on Friday, a good four points lower from levels seen a week ago.
It is a similar story for the sovereign’s five-year CDS, which was being quoted at 61-62 points upfront versus 57.25-58.25 points last Friday.
“We had some optimism at the beginning of the week, but it has been weaker as (President) Maduro’s rhetoric has raised fears about clashes between the government and the opposition next week,” said Piedrahita.
Argentina E&P company Medanito has selected Itau and UBS to take it on an international roadshow ahead of a possible capital markets transaction.
The company will meet fixed income investors in London on December 7, Switzerland on December 8 and New York on December 9 and 10. Expected rating is CCC+ by Fitch.
Pemex (Baa1/BBB+/BBB+) mandated Barclays and HSBC for an investor call that was scheduled for Wednesday.
Arcos Dorados, the largest McDonald’s franchiser in South America, has finished Swiss road shows via Credit Suisse. The Argentina-based, NY-listed company is rated Ba3/NR/BB+.
Mexican white-goods manufacturer Controladora Mabe has finished investor meetings through Barclays, Bank of America Merrill Lynch, Citigroup and JP Morgan. Ratings are BB+/BB+.
Brazilian airline Gol (B3/B-/B-) has completed roadshows with Morgan Stanley, Credit Suisse and Citigroup. (Reporting by Paul Kilby; Editing by Marc Carnegie)