8 de diciembre de 2015 / 20:45 / en 2 años

LATAM WRAP-Oil credits, BTG Pactual bonds under pressure

NEW YORK, Dec 8 (IFR) - Commodity-related credits remained under pressure on Tuesday, as crude prices plunged to lows not seen since the financial crisis.

Spreads on 10-year sovereign bonds issued by Mexico and Colombia have widened by 12bp and 20bp since Friday’s close as dealers reacted to a 6% slide in crude over the same period.

Notes with similar maturities issued by the two countries’ state-run oil companies - Pemex and Ecopetrol - similarly widened by 16bp and 30bp.

In Brazil, bonds of BTG Pactual dropped to new lows after Brazilian prosecutors formally charged the bank’s founder and former chief executive in an ongoing corruption probe.

BTG’s senior unsecured 2020 notes were ending the day at a cash price of 52-54, or eight points lower on the day, while the 2022s lost around seven points to close at 45-47, according to a New York-based trader.

Against this backdrop, even a top-notch issuer like Chile, which on Tuesday kicked off investor meetings in Europe, is seen as an unlikely candidate to tap the market before year-end.

The sovereign, rated Aa3/AA-/A+, is expected to return to the international bond markets, after announcing a four-day roadshow in Europe and the US.

It hired Bank of America Merrill Lynch, Citigroup, HSBC and Santander to organize the meetings, which are being marketed as investor updates without mention of any specific transaction.

Latin American sovereigns are seen as having a tight window to issue new debt before a Federal Reserve meeting next week that could result in the first US rates hike in nearly a decade.

Getting some of the investor work done now, however, could allow Chile to move quickly if it decides to pull the trigger on a bond sale in the new year, bankers said.

Chile was last in the international capital markets in May, when it raised EUR1.39bn through a two-part bond offering.

It last tapped the US dollar market in December 2014, when it raised a combined US$2bn through dollar and euro-denominated bonds. (Reporting by Davide Scigliuzzo; editing by Shankar Ramakrishnan)

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