26 de marzo de 2015 / 14:43 / en 3 años

Slow start for LatAm despite oil price jump

NEW YORK, March 26 (IFR) - Latin American credits were off to a lackluster start Thursday despite an uptick in crude prices, with names largely drifting lower amid a softer tone in the broader market.

Global stocks were weaker but oil surged after Saudi Arabia launched airstrikes in Yemen, pushing Brent up US$3 to around US$60 a barrel and providing some support to the oil-rich region.

“The fact that oil prices are up helps (Latin America),” said a syndicate manager. “That US rates are within 2% on the 10-year is also driving people into better-yielding credits.”

But with investors uncertain about the direction of US Treasury yields ahead of the release of fourth-quarter GDP figures Friday, the general mood was cautious.

“It looks like the market is trying to go lower, but there aren’t a lot of aggressive offers,” said Rodrigo Covian, head of fixed-income at Bulltick.

After an active day Wednesday, Brazilian credits were taking a breather but remained well supported after a decent rally this week.

But Brazil’s Petrobras’s curve was some 10bp wider early in the session, with the 2024s and 2044s being quoted at 540bp-535bp and 545bp-535bp, respectively.

Bonds issued by the state-owned oil entity suffered price swings yesterday but ended the day tighter after buyers were seen returning to the credit on news that regulators had agreed on how Petrobras would calculate corruption losses.

The company may be able to deliver audited financials before it breaches covenants on its debt.

Elsewhere in the oil space, bonds issued by Ecopetrol, Pemex and Pacific Rubiales were barely budging despite today’s leap in crude prices.

Colombia focused E&P name Pacific Rubiales’s 2025, for example, remained near recent lows at 58.25-60.50. “I thought bonds related to oil would have jumped, but it is not the case,” said Covian.

It is a different story for Venezuela, however, with the sovereign and state-owned oil company PDVSA up about 3/4 of a point this morning. The sovereign’s 2022s were being quoted at 44.25-45.25, while PDVSA’s 2017s were spotted at 40.00-41.00.

Meanwhile a newly minted 8.5% non-call five hybrid perp from Colombian telco ColTel was hovering just below re-offer.

Despite a relatively large US$1.4bn order book, those bonds fell to as low as 99.125 on the break after pricing at par yesterday, but have since rebounded to around 99.75, said a New York-based trader.

PIPELINE In Peru, Mexican media company TV Azteca is expected to bring to market a project bond related to the development of Peru’s fiber optic network as soon as this week. (Reporting by Paul Kilby; Editing by Marc Carnegie)

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