Emerging markets bonds strengthen with Treasuries; market digests new supply from Mexico

By Christine Van Dusen

Atlanta, Aug. 9 – Latin American bond spreads were tighter and cash prices were higher on a solid Tuesday for emerging markets assets, as U.S. Treasuries rallied and the market digested a new deal from Mexico.

The emerging markets debt universe, overall, has “once again proven just how resilient it is,” a London-based trader said. “And interestingly enough, the market is shrugging off any negative oil price moves.”

Mexico’s five-year credit default swaps spreads closed the session at 138 basis points from 139 bps while Brazil's moved to 265 bps from 271 bps.

“Cash prices do underperform spread movement,” a New York-based trader said. “Latin American high yield finishes firmer on the session, with both Venezuela and Argentina higher.”

“Good volumes for the session, with overall better buyers seen, and solid two-way action on the new Mexico 2047s,” he said.

The sovereign on Monday priced a two-tranche issue of $2.76 billion notes due in 2026 and 2047, with a $760 million tap of the 4 1/8% notes due 2026 coming to the market at 108.831 to yield 3.042%, or Treasuries plus 145 bps.

The new $2 billion 4.35% notes due 2047 priced at 99.735 to yield 4.366%, or Treasuries plus 205 bps. The notes were talked in the 225 bps area.

Those notes were spotted Tuesday at 101.60 bid, 101.90 offered.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.