NEW YORK, July 13 (IFR) - Latin American credit spreads were ending the day tighter on Monday as sentiment was helped by a rise in equity indices.
Names that were recently hit by the sell-off in commodities, such as Brazilian miner Vale, have more have recovered from last week’s losses and continued to grind tighter, said a trader.
Vale’s curve was ending the session some 10bp tighter in spreads, while notes issued by state-run oil company Petrobras were about 7bp tighter on average.
“People are putting money to work and prices are slightly up, but liquidity is still very poor.” said a corporate bond trader in New York.
“There are many opportunities and relative value ideas, but real money (accounts) are not selling and dealers are not taking risks.”
Colombia’s oil company Ecopetrol was among the underperformers, with the belly of its curve some 2bp wider on the day.
Elsewhere in the region, trading in Argentine bonds was somewhat muted as the market digested a new poll showing business-friendly presidential candidate Mauricio Macri as having a 3.6 percentage point lead over his main opponent Daniel Scioli in potential run-off elections.
Argentina’s Discount bonds were unchanged to half a point lower at a cash price of around 97.375 mid-market, while local-law Bonar 2024s were a touch higher at 98.5.
Analysts and traders, however, said market participants would probably want to see further confirmation of Macri’s lead in the polls before pushing bond prices significantly higher. The Argentine government’s plan to issue more local-law bonds to pay debts may also have capped gains.
Argentina announced on Monday that it will issue US$784.27m worth of Bonar 2024s and Bonad 2018s to oil and gas companies to settle debts that originated from a tax credit program.
“The market doesn’t want any more of (President) Cristina (Fernandez‘s) bonds,” said Siobhan Morden, head of Latin America strategy at Jefferies. “The more they issue the more they are going to face decreasing demand. The secondary bid is quickly going to disappear.”
America Movil (A2/A-/A) and Telesites (expected NR/BBB-/BBB-) have wrapped up investor meetings via Citigroup, Indursa, BBVA and Santander.
The meetings were intended to discuss the new Operadora de Sites Mexicanos business and gauge interest for new 144A/Reg S deals in Mexican pesos and/or USD.
Banco Santander Chile (Aa3/A/A+) has wrapped up meetings via Deutsche Bank and Santander to discuss opportunities in the domestic Chilean markets.
Jamaica, rated Caa2/B/B-, has wrapped up investor meetings via Citigroup. The meetings were described as a non-deal roadshow, but markets have been expecting the sovereign to raise funding to retire a PetroCaribe loan owed to Venezuela. (Reporting by Davide Scigliuzzo; Editing by Shankar Ramakrishnan)