Romania sells notes; Lat-Am spreads wider on weaker economic data; QIB trades near reoffer

By Christine Van Dusen

Atlanta, Oct. 21 – Romania priced new notes as sovereign spreads for Brazil widened on Wednesday morning, following reports of a worsening deficit and growing inflation, as well as a weaker growth outlook.

Liquidity, a trader said, is unlikely to improve.

As the morning went on, Brazilian bonds traded better, despite the currency’s sell-off, another trader said.

Brazil-based Odebrecht SA was also in the news on Wednesday, after a federal judge ordered preventive detention for chief executive officer Marcelo Odebrecht and five other defendants as a result of their alleged connection to a Petroleo Brasileiro SA’s bribery scandal.

“We expect some moderate negative reaction to the company’s bonds as a result of this announcement,” according to a report from Schildershoven Finance BV. “We consider investing in the company as risky, due to high level of uncertainty.”

Other corporate bonds from Latin America saw very little selling on Wednesday, another trader said.

The new issue of notes from Qatar Islamic Bank SAQ – $750 million 2.754% Islamic bonds due 2020 that priced Tuesday at par to yield mid-swaps plus 135 bps – opened on Wednesday at par bid, 100¼ offered, a trader said.

Also on Wednesday, market sources were whispering about a possible issue of euro-denominated notes from Macedonia and a three- to five-year issue of notes from Russia’s OJSC Alfa Bank.

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