NEW YORK, Feb 23 (IFR) - Argentina bonds proved to be the star performers in what was a mixed session for a region where Brazilian and Venezuelan assets continue to trade poorly.
Low-beta credits such as Chile and Peru also enjoyed strong demand thanks to a rally in US Treasuries, with the yield on the US 10-year benchmark note compressing by some 6bp Monday.
Yet it has been Argentina’s stellar surge in prices over the past few sessions that surprised, especially given uncertainties over a US court hearing next week to decide whether payments on some local-law notes should continue.
“Argentina is trading extremely well,” said a sovereign bond trader in New York. “I think it is a combination of shorts getting stopped out, distressed investors stepping out and very positive technicals.”
The country’s local-law Bonar 2024s, for example, were ending the day at a cash price of 106.0, the notes’ highest level since they were first issued in May 2014, according to Thomson Reuters data.
Pars and Discount notes, which the sovereign default on last year, were also trading at or near all-time highs, to be quoted at 55.5 and 100.0 respectively.
Brazil was once again the underperformer, with its curve seen closing lower in price and wider in spread terms. The 2025s, for example, ended the session a point down at a cash price of 97.0.
Hurt by a 2% slide in oil prices, Venezuelan bonds were also suffering amid light volumes, with the 2022s ending the day at 45.75-46.75, down half a point from Friday.
In primary markets, Uruguay broke a 7-day lull in issuance for Latin American borrowers by bringing to market a reopening of its 5.1% 2050 note after receiving over US$2bn in demand.
The sovereign opted for size over price when it increased the deal by another US$200m to launch a US$1.2bn tap to yield 235bp over US Treasuries, flat to initial price thoughts of 235bp area.
“The is still appetite for duration, and there aren’t a lot of options for people who want to stay clear of Brazil and energy names,” said the trader.
Mexican telco America Movil is meeting investors in Europe and the US this week as it seeks to market a global peso trade through BBVA, Citigroup, Credit Suisse, Deutsche Bank, HSBC and Morgan Stanley. Meetings will wrap up on February 27.
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.
Panama filed with the SEC to sell up to US$3.04bn in debt, raising expectations that the sovereign could soon come to the international bond market. (Reporting by Davide Scigliuzzo; Editing by Paul Kilby)