EM see ‘massive’ swings, volatility; Chile, China Energy, Ping An Real Estate tap market

By Christine Van Dusen

Atlanta, Jan. 11 – Chile, China Energy Reserve and Chemicals Group Co. Ltd. and China’s Ping An Real Estate Co. Ltd. sold notes on a topsy-turvy Tuesday for emerging markets assets – a day that saw some credits fall and then rally while others just suffered amid lower commodity prices.

“As markets continue to see massive intraday swings, it becomes increasingly difficult to navigate price action and source liquidity,” a trader said. “With volatility spiking and looming issuance, this is likely to be the trend for at least the near future.”

Brazil's five-year credit default swaps spreads tightened to 488 basis points from 490 bps while Mexico's moved to 188 bps from 190 bps, a trader said.

But Venezuela continued to sell off on oil weakness and worries about the sovereign’s debt load, he said. The sovereign’s 2027s closed at 36 from 38, and PDVSA's 2017s finished at 45.25 from 48.75.

“Wild ride,” he said.

Brazil-based Vale SA was in the news after drawing down $3 billion from its $5 billion revolving credit facility as it struggled to close the sale of its coal business in Mozambique.

“Liquidity right now is not only credit-specific but also bond-specific, but at least there is some,” a trader said.

Chile-based Codelco SA widened on Tuesday as copper prices continued to plummet, he said, and Mexico-based Cemex SAB de CV traded lower.

© 2015 Prospect News.
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