NEW YORK, Feb 18 (IFR) - Latin American credit markets were seeing a quiet but firm start Wednesday morning as negative headlines out of Europe subsided and investors turned their attention to the Fed minutes to be released later today.
Brazil was leading the charge tighter as the Carnival celebration wraps up today. Oil company Petrobras curve tightened another 10-15bp in early trading with the 2016s, 2024s and 2044s being quoted at around 475bp-455bp, 500bp-495bp and 505bp-495bp, respectively.
“Brazil is the main mover because it is so cheap,” said a New York-based trader. “Mexico is holding in, but a lot of the corporates there are (already) priced to perfection.”
New Brazilian Finance Minister Joaquim Levy told investors in New York this morning that the government would meet its primary budget goal of 1.2% of GDP this year and that legislation would be passed to correct the country’s fiscal problems, according to Reuters.
Hopes that Greece and its creditors will soon find a temporary fix to the country’s debt crisis has erased some risk aversion, with markets now focused on the release of FOMC minutes and any clue about the timing of rate hikes in the US.
The yield on the US 10-year Treasury is coming off yesterday’s high, and was seen this morning around 2.11%. Meanwhile, oil names were holding relatively steady in spite of another reversal in the price gains of crude.
According to Reuters, Brent crude futures fell about a dollar this morning to hit US$61.53, while US crude dropped to US$52.65.
E&P credit Pacific Cubicles saw its 2025s quoted flat at 65.205-66.00, while Colombian state-owned oil unit Ecopetrol 2025s and 2045s were being quoted at 94.375-95.375 and 96.50-97.50, respectively.
In the primary markets, the government of Costa Rica officially mandated Deutsche Bank and HSBC on a new cross border bond amid talk that it could try to raise 30-year money in coming weeks.
Elsewhere, corporate borrowers are largely at a standstill as the they look to update their financials and release 4Q numbers in coming weeks.
Thereafter, companies should start emerging again with deals. “The tone feels good, so I don’t think that is holding anyone back,” said a syndicate manager.
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 Paul Kilby; Editing by Marc Carnegie)