NEW YORK, April 29 (IFR) - Latin American credits weakened on Wednesday after the US reported slower-than-expected economic growth for the first quarter, while US Treasuries sold off sharply.
Bonds across the region were generally underperforming the US Treasury curve, where yields on the 10 and 30-year benchmarks rose nearly 10bp following the disappointing growth print.
“Everything in on the weaker side today,” said a trading desk analyst in New York. “It seems to be a generalized risk-off type of mood, but it is difficult to pin point one factor. Obviously the move in Treasuries was surprising.”
Data showed the US economy grew by just 0.2% in the first quarter - the softest print in a year and well short of the 1.0% rate that had been expected.
That widened the spreads of key Brazilian corporates Petrobras and Vale by as much as 10bp. Petrobras’s 2024s and 2044s were quoted at 430bp-429bp and 470bp-460bp respectively.
“The market is melting,” said a Latin America corporate bond trader in New York. “All the long bonds are better offered, down a point.”
Bonds in the high-yield segment were also losing ground, with most credits quoted between a quarter and three quarters of a point lower in early trading, according to another trader.
Despite all that, however, recent bond issues appear to be holding up relatively well. A 2025 from Chilean energy company Guacolda was traded at 100.5, half a point above re-offer.
Meanwhile Brazil’s Votorantim Cimentos could end the lull in international bond sales from Brazilian issuers after announcing meetings in Europe ahead of a potential euro-denominated issue.
It mandated Citigroup, Deutsche Bank, HSBC, Banco Votorantim, BB Securities, Bank of America Merrill Lynch, MUFG and Santander GBM to arrange meetings in Frankfurt and Munich on May 4, London on May 5, and Amsterdam and Paris on May 6.
Banco de los Trabajadores (Bantrab) is out with guidance of 10.50% area on a new US$100m 10-year Tier 2 subordinated bond ahead of expected pricing on Wednesday.
The Guatemalan bank, which focuses on payroll-lending to public sector employees, wrapped up roadshows last week through Deutsche Bank. The bank has corporate ratings of Ba3/BB-, while the bond is expected to be rated B2/B+.
JB y Compania SA de CV (Jose Cuervo) will start fixed-income investor meetings this week through Bank of America Merrill Lynch and Citigroup as it seeks to market a possible senior unsecured US dollar bond.
The borrower will be in London on Wednesday, in Boston on Thursday and in Los Angeles on Friday. It will head to Chicago on May 4 and New York at May 5. The spirits company, rated BBB/BBB by S&P and Fitch, is the world’s largest tequila producer.
Banco Latinoamericano de Comercio Exterior (Bladex), a Panama-based trade bank, has kicked off fixed-income investor meetings via Bank of America Merrill Lynch and Citigroup.
The borrower, rated Baa2/BBB/BBB+, will visit New York and Philadelphia on Wednesday.
Pacific Rubiales, the largest private oil producer in Colombia, has kicked off investor meetings through Bank of America Merrill Lynch, Citigroup and HSBC. The company heads to Santiago on April 30, Los Angeles on May 4 and Miami on May 6. (Reporting by Davide Scigliuzzo; Editing by Marc Carnegie)