NEW YORK, Dec 11 (IFR) - Latin American credits came under renewed pressure on Friday, amid a broader sell-off in commodities and equities, with Brazil once again leading the sell-off.
“You look at the screens today and you want to cry,” said a senior banker covering the region.
A 4% slide crude, with Brent sliding below US$38 a barrel and nearing an 11-year low, drove down corporate credits across the region though actual trading volumes were low.
Bonds issued by Brazilian state-run oil company Petrobras slid by around a point in price in the belly of the curve, with the 2024s seen ending the day at 72.5-73.5, according to one New York-based trader.
Even financials were getting hit, with Itau’s 2023s, for example, ending the day half a point lower at 88.75-89.25.
The negative sentiment has so far prevented Argentine oil and gas company Medanito from pulling the trigger on its planned US$150m bond sale.
“No one in their right mind would be moving ahead this week,” said a banker close to the trade.
Elsewhere in the region, Argentina’s new government is negotiating with a group of Wall Street banks for a credit line worth up to US$7bn to bolster its low foreign reserves and help it eventually lift capital controls, a banking source said told Reuters on Friday.
The source said Argentina was in talks with HSBC, JP Morgan, Goldman Sachs, Deutsche Bank and Citigroup. But he said there remained obstacles to an agreement and that no immediate deal was likely.
“The banks are working on a deal. It would be difficult for anything to come about immediately. There are some key details needed to close this out that are missing,” said the source, without giving more details.
Reporting by Davide Scigliuzzo; Additional reporting by Jorge Otaola and Nicolás Misculin; Editing by Jack Doran