5 de junio de 2015 / 18:47 / hace 3 años

LatAm credits drift in range amidst rate volatility

NEW YORK, June 5 (IFR) - Latin America credits were largely ending flat to slightly softer on Friday after a busy week in the primary market, which saw close to US$4.5bn in new supply.

Rate volatility continues to weigh on sentiment, and another spike in US yields today didn’t help.

A strong non-farm payrolls numbers sent the yield on the 10-year US Treasury as high as 2.44% amid expectations that the Fed could tighten monetary policy sooner rather than later.

A renewed surge in supply has also weakened the backdrop somewhat for the region’s debt prices during a week that saw more outflows out of EM debt funds.

Sub-investment grades, which are more immune to Treasury volatility, were some of the better performers Friday. LatAm Airlines’ new 2020s jumped to 101.00 after pricing yesterday at par to yield 7.25%, flat to initial price talk.

Bonds issued by Petrobras, which shocked markets earlier this week by coming with a rare Century bond, were largely drifting amid light flows.

The new 100-year bond was being quoted at 525bp after hitting an earlier wide of 528bp, leaving it essentially flat to where it closed on Thursday.

Real money accounts were seen selling their 30-year holdings in Petrobras to go into the longer bond for a nice yield pick-up, said one trader.

Meanwhile, E&P credit Pacific Rubiales was seeing little movement in its bond prices Friday following Thursday’s announcement that bondholders had agreed to covenant amendments. The move is one of the conditions required to allow the company to be bought by Mexican conglomerate Alfa and Harbour Energy.

Bondholders received a consent fee of US$5 per every US$1,000 in principal, which they will receive on completion of the acquisition.

This comes as Argentine real estate developer Raghsa launched a par-for-par exchange as it seeks to extend maturities.

The borrower is asking holders of its 8.5% amortizing 2017s to swap those securities for newly issued 8.0% 2021s. Because it is a par-for-par exchange, the company will not receive any cash proceeds. As a result its debt will not increase, said Moody‘s, which assigned the deal a Caa1 rating.

The transaction, which is being led by Itau, is subject to at least 70% of the holders participating in the exchange. Creditors with at least 50% of the issue must also agree to covenant changes, according to Moody‘s.


Lima Metro Line 2 Finance Limited, established by a consortium of Peruvian and European sponsors, has selected banks for a global roadshow ahead of a potential 144A/Reg S USD bond sale of US$1.14bn of senior secured notes.

The issuer will wrap up roadshow on Monday. Citigroup, Morgan Stanley and Santander have been mandated as global coordinators for the bond, which is expected to be rated Baa1/BBB/BBB.

Salvadoran bank Banco Agricola, rated Ba2/BB+, has mandated Bank of America Merrill Lynch and Deutsche Bank to take it on the road to market a 144A/Reg S senior unsecured bond.

The borrower is in Los Angeles and Bogota today, and will head to London, Switzerland and Santiago on June 8, to New York and Miami on June 9 and to Boston and New York on June 10. Banco Agricola is 97.35% owned by Bancolombia, which is rated Baa2/BBB-/BBB.

Brazilian telecoms firm Oi started meeting bond investors today ahead of a possible euro 144a/Reg S bond may follow. The Ba1/BB+BB+ rated firm has mandated BB Securities, BofA Merrill Lynch, HSBC, Santander, Bradesco BBI, Citigroup, Deutsche Bank, NP Paribas, BTG Pactual and Itau BB to arrange the meetings.

Brazilian aircraft manufacturer Embraer, rated Baa3/BBB, has mandated Citigroup and Morgan Stanley to meet fixed-income investors ahead of a potential SEC registered bond offering. The company finished marketing in New York on Tuesday. (Reporting By Paul Kilby; Edited by Shankar Ramakrishnan)

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