LatAm Bond Trading Update

Posted by: : Shayne HeffernanPosted on: March 1, 2015 LatAm Bond Trading Update
 

Latin American credits generally saw a strong bid on Tuesday morning amid solid corporate earnings results and hopes of a dovish tone when Fed chief Janet Yellen speaks to Congress.

But while tone was positive, market players said not many bonds were changing hands in early trading ahead of Yellen’s 10:00am appearance on Capitol Hill.

“There are definitely firmer bids out there, but there isn’t a lot of price action,” said a corporate bond trader in New York.

“Of the inquiries we received, I would say 70% are buyers and 30% sellers.”

Corporates in Mexico, Peru and Chile were seen as particularly in demand, while even battered Brazilian credits such as state-run oil company Petrobras enjoyed a bit of a bounce after Monday’s slide.

Trade in Latin America with the World’s Leading Platform Open an account here , call us at 312 219 1354, or email us to get started.

The company’s 2024s, for example, opened 7bp tighter at a spread of 538bp-533bp, benefiting from general risk-on sentiment and some buying appetite after recent weakness, said a second trader in New York.

A rebound in oil prices, with Brent recovering after Monday’s slide to climb back above the US$60 a barrel mark, provided some support for Venezuelan bonds.

The sovereign’s 2022s were opening a quarter of a point higher at 46-47, according to a broker.

In primary markets, activity is expected to remain subdued during Yellen’s two-day testimony before Congress, with telcoms group Digicel the only notable exception.

Digicel, which has operations in the Caribbean, Central America and Asia, announced a new US$925m 8-year senior unsecured bond offering.

Citigroup is left-lead, or senior underwriter, on the transaction, while JP Morgan, Barclays, Credit Suisse and Deutsche Bank are also bookrunners.

The company plans to use proceeds from the sale, which is expected to price on Monday, to redeem existing 8.25% notes due 2017 issued by Digicel Limited.

PIPELINE

Mexican telco America Movil is meeting investors in Europe and the US this week as it seeks to market a global peso trade through BBVA, Citigroup, Credit Suisse, Deutsche Bank, HSBC and Morgan Stanley. Meetings will wrap up on February 27.

Mexican media company TV Azteca is bringing to market a rare project bond related to the development of the Andean country’s fiber optic network.

Costa Rica has chosen Deutsche Bank and HSBC as lead managers on an up to US$1bn international bond sale that could take place as early as this month.

Panama filed with the SEC to sell up to US$3.04bn in debt, raising expectations that the sovereign could soon come to the international bond market.

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Shayne Heffernan Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

Trade FX, Equities and Options with the World's Leading Platform Open an account here , call us at 305 4904 116, or email us to get started.

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