NEW YORK, Feb 13 (IFR) - Latin American credits ended stronger Friday after a reduction in geopolitical risks, higher oil prices and stronger economic data out of Germany helped spur investor optimism in the broader markets.
“The markets are feeling more comfortable because of oil and the ceasefire between Russia and Ukraine,” said a broker in Miami. “Everyone is expecting some good news from Greece (next week).”
Argentina’s sovereign bonds stood out as the outperformers, after a UK court asserted its jurisdiction over the country’s euro-denominated notes, although some questioned whether the market’s optimism was justified.
Those bonds were ending close to their intraday highs, after a three-point rally in the morning, while US dollar-denominated bonds were also closing up to a point higher in cash.
“The mood was generally positive, and we saw better prices all around,” said the broker in Miami. “Argentina was flying after the English ruling.”
Even Argentina-law bonds advanced, with Boden 2015s, for example, ending the day up three quarters of a point at 102.60.
Venezuelan bonds also rallied, thanks to a 3.7% leap in Brent crude prices and to cautious optimism over a new foreign exchange trading system that set the weakest of the country’s three exchange rates at a value of 170 bolivars against the US dollar, close to the black market rate of 190.
“We feel that the market will most likely adjust down as the process, and implementation of the FX mechanism are exposed,” said Jorge Piedrahita, CEO of brokerage Torino Capital.
Among investment-grade sovereign, Brazil’s 2025s were closing at 98.5, up half a point on the day, while Mexico’s 10-year notes were spotted at 102.10, also up half a point.
Grupo Senda Autotransporte, a Mexican bus transportation company, has finished roadshows ahead of a possible USD 144A/Reg S bond offering. Expected ratings are B/B (S&P/Fitch). CS and JP Morgan are active bookrunners, and BBVA passive.
Mexican media company TV Azteca is bringing to market a rare project bond related to the development of the Andean country’s fiber optic network. Pricing is expected toward the end of February.
Costa Rica has chosen Deutsche Bank and HSBC as lead managers on an up to US$1bn international bond sale that could take place as early as this month, market sources told IFR. (Reporting by Davide Scigliuzzo; Editing by Paul Kilby)