NEW YORK, April 6 (IFR) - Latin American credit markets were largely well supported Monday as crude prices bounced back and yields on the 10-year US Treasury stuck to sub 2% in the wake of Friday’s poorer-than-expected job numbers.
Brazilian assets were well bid following Petrobras’ rally last week. Prices on the sovereign’s 4.25% 2025s were also drifting higher at around 99.30, helped by a steady US Treasury market.
Meanwhile, news that Saudi Arabia had raised prices for crude sales to Asia - an indication of growing demand for the commodity - helped lift prices for Brent today and provided another prop for Latin American oil exporters. This included Venezuela, where the sovereign’s 2022s were being quoted at 44.75-45.75.
Despite that, Brazilian oil services companies were trading to their own dynamic as the investigation into kick-backs at Petrobras continued to take its toll. The latest company to come under investors’ microscopes is Schahin Oil and Gas, which according to local newspaper O Estado de Sao Paulo, is soon expected to file for bankruptcy protection.
The company’s 2022s were being marked down in response to the news and trading in the low 50s, while Odebrecht’s rig backed bonds were also slipping in sympathy to hit the mid to high 70s, a trader said.
In the sovereign space, Argentina debt prices were inching higher despite news that the Central Bank had sent regulators to Citibank Argentina’s headquarters today. Bonar 2024s were trading back up at 105.50-106.50 after slipping to 104.50 last week.
This comes after Clearstream suspended and then renewed settlement last week on the vast majority of securities in the local markets after its custodian Citibank was prevented from carrying out such services.
Argentine regulators have accused the US bank of violating local laws after cutting a deal in US courts that allowed it to facilitate payments on local law dollar bonds. The government has stopped Citibank Argentina from carrying out capital markets operations and last week effectively forced its CEO to step down.
Jorge Piedrahita, CEO of broker Torino Capital, said that the regulator’s inspection of Citigroup to ensure the bank is functioning properly is “a sign that the worst fears of a settlement shutdown in Argentina will likely not be realized.”
Pacific Rubiales, the largest private oil producer in Colombia, has hired Bank of America Merrill Lynch, Citigroup and HSBC to arrange a series of fixed-income investor update meetings in the US, Europe and Latin America between April 8 and May 6.
The meetings will take place in London on April 8 and 9, Switzerland on April 10, New York on April 13 and 14, Boston on April 15, Santiago on April 30, Los Angeles on May 4 and Miami on May 6. (Reporting By Paul Kilby; editing by Shankar Ramakrishnan)