Pacific Rubiales, Odebrecht eyed; liquidity thin, pressure for Ukraine; flows more active

By Christine Van Dusen

Atlanta, Oct. 17 – Investors on Friday were keeping an eye on Colombia-focused Pacific Rubiales Energy Corp., which announced it will jointly explore business opportunities with Mexico’s Petroleos Mexicanos SAB de CV (Pemex).

Pacific Rubiales’ curve climbed 4 basis points on the news that the oil and gas company had entered into a three-year agreement with Pemex to discuss and analyze potential oil and gas cooperation in Mexico, a New York-based trader said.

The curve dropped back about ¾ point as Friday rolled on, but high-grade credits from Latin America were mostly tighter and firmer overall, he said.

In particular, corporate notes from Mexican issuers improved, and offers became thin on some credits, he said.

Still, some high-grade bonds from Brazil continued to lag, he said, pointing to names like Odebrecht SA.

The builder was in the spotlight on Friday following accusations that it was part of a cartel that overcharged for projects and diverted money.

In other news, sovereign bonds from Ukraine remained under pressure amid thin liquidity at the end of the week, said Svitlana Rusakova of Dragon Capital.

From the Middle East, bonds closed at about the same levels as on Tuesday, a London-based trader said.

“Flows are today were pretty active for a Friday, with some position re-jigging and investment-grades across this part of the world retaining a solid bid,” he said.

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