NEW YORK, March 30 (IFR) - Brazil outperformed in an otherwise quiet trading session for Latin American credits Monday, suggesting most accounts have already squared their positions ahead of the upcoming holiday.
“After the end of the month, market activity is going to be pretty much shut for Latin America,” said a corporate bond trader in New York. “It already feels like real trading is behind us.”
Brazil’s bonds were ending the day some 5bp tighter, a better performance than Mexico, Peru and Colombia, which closed unchanged to 1bp tighter, according to the trader.
In the corporate space, notes issued by Brazilian state-run oil company Petrobras did well, with most buying concentrated in the early part of the day.
The company’s 2024s and 2044s ended the day at spreads of 527bp-517bp and 532bp-522bp respectively, or between 5bp and 6bp tighter.
News that Petrobras could release audited results as soon as mid-April after it agreed with regulators about the methodology for calculating corruption losses, helped the bonds.
But Brasil Foods and steelmaker Gerdau saw their bonds slide after reports that they are among Brazilian firms being investigated for tax fraud, said the trader.
Brasil Foods’s 2024s dropped 1.5 points to close at 96-97, while Gerdau’s 2024s were down 1 point to 96.5-97.5.
In Mexico, notes issued by Gruma jumped by more than a point after the company on Friday received its second investment-grade rating thanks to an upgrade to BBB- from BB+ by S&P.
“Gruma is going to be a sort of Bimbo, a candidate for investors in the crossover space,” said a third trader in New York. Gruma’s 2024s were ending the day quoted at 105.5-106.5 from their 104.5 close on Friday.
Elsewhere in the region, traders marked down Argentina’s local-law bond prices by as much as two points after Clearstream said it will not process coupon payments on local-law securities covered by a US court injunction.
Argentina-law Discounts were being indicated at 95.50-96.00 versus 97.00 on Friday, while Boden 2015s were being quoted at 100.75-101.00, or a good 50 cents lower than levels seen at the end of last week. (Reporting by Davide Scigliuzzo; editing by Shankar Ramakrishnan and Marc Carnegie)