NEW YORK, May 4 (IFR) - Latin American credit markets opened marginally stronger on Monday at the start of a busy week for corporate earnings across the region, which will also include the US jobs report.
Trading was subdued at the open as local traders and investors returned from a long May Day weekend, while the UK bank holiday was also keeping a lid on the action.
Investment-grade corporate credits opened 1bp-2bp tighter in spread, while high-yielding sovereigns Argentina and Venezuela were outperforming low-beta credits such as Mexico.
“It is tough to really give a handle today,” said a sovereign bond trader in New York. “Brazil cash is under a bit of pressure, but Argentina and Venezuela are a touch firmer.”
Weakness on the Brazilian bond curve was concentrated at the long end, where the sovereign’s 2044s were down half a point from their Friday’s close to 91.5-92.0, said the trader.
Argentina’s Par and Discount bonds, meanwhile, opened roughly a quarter of a point higher, quoted at 58.00 and 102.75 respectively mid-market.
Stable global oil prices were also providing some support to Venezuelan bonds, with the sovereign’s 2022 spotted a quarter of a point higher at 55.5 mid-market.
A string of corporate earnings this week is likely to capture the attention of traders and investors, with Brazil’s Gerdau and Braskem among the names due to report.
Chile could soon return to international capital markets with a new bond deal after sending requests for proposal to banks earlier this month, according to three sources with knowledge of the situation.
The sovereign, rated Aa3/AA-/A+, is expected to raise at least US$1bn-equivalent through the deal, which could materialize as soon as this week, one of the sources said.
Votorantim Cimentos (Baa3/BBB/BBB) has mandated Citigroup, Deutsche Bank, HSBC, Banco Votorantim, BB Securities, Bank of America Merrill Lynch, MUFG and Santander GBM to arrange a series of investor meetings ahead of a potential euro-denominated bond issue.
The meetings kick off in Frankfurt and Munich on Monday and continue in London on Tuesday and Amsterdam and Paris on Wednesday.
JB y Compania SA de CV (Jose Cuervo) kicked off meetings last 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 Chicago on Monday and New York on Tuesday. The spirits company, rated BBB/BBB by S&P and Fitch, is the world’s largest tequila producer.
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 Los Angeles on Monday and Miami on Wednesday. (Reporting by Davide Scigliuzzo; Editing by Marc Carnegie)