11 de agosto de 2015 / 18:48 / en 2 años

LATAM WRAP-LatAm credit markets slip in risk-off mode

NEW YORK, Aug 11 (IFR) - LatAm credit markets were widening on Tuesday after China’s devaluation of the yuan and another drop in oil prices added to the woes of a region reliant on commodity exports.

The risk-averse tone put particular pressure on regional currencies, driving them lower on worries that the weaker yuan would impact the region’s competitiveness.

The Brazilian Real was headed lower against the dollar to hit 3.50 this morning, edging closer to the 12-year low of 3.51 seen earlier this month.

At those levels, Fitch calculates, oil company Petrobras could see Ebitda fall to an annual rate of US$23.6bn during the second half of the year, down from the US$27.9bn in 1H15.

That is bad news for the highly indebted company, which is struggling to improve its standing in the market by reducing leverage ratios considered too high for its ratings level.

“Fitch expects company leverage to remain above 5x should the current exchange rate prevail throughout 2H15 and the company keeps liquid fuel prices unchanged,” the agency said.

Petrobras’s benchmark 2024 was quoted today at 570bp, a touch wider than the 560bp-565bp level seen on Monday.

On the sovereign side, prices on Brazil 2025s were proving relatively resilient at 92.65-92.90, but spreads were gapping wider as US Treasuries rallied on a flight-to-quality bid.

Low oil prices - crude sold off again Tuesday after OPEC raised its forecast for 2015 oil supplies from non-member countries - should help Brazil, a net importer of oil.

Elsewhere, however, the latest tumble in crude - as well as copper and aluminum - means more pressure on commodity-related credits.

Chilean copper giant Codelco saw its bond spreads widen, with the 2022s spotted at 192bp versus the 180bp seen last week, according to Thomson Reuters data.

Colombia state-owned oil company Ecopetrol meanwhile saw its 2026s quoted at a mid-market price of around 95.125, near recent lows of 94.875 in late July. (Reporting by Paul Kilby; Editing by Marc Carnegie)

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