LatAm trades ‘sideways’ as market mulls Fed rate hike, IMF’s boost of funds for Argentina

By Rebecca Melvin

New York, Sept. 26 – Latin America debt traded flat to lower on Wednesday with parts of the emerging markets debt market a bit stronger as the U.S. Federal Reserve raised its target interest rate as expected by 0.25% to 2.25%.

In addition, Argentina and the International Monetary Fund announced that a revised agreement had been negotiated which increases total funds and increases the amount of near-dated disbursements, a New York-based market source said.

The Argentina-IMF news came late in the day, so markets had not had time to react, but it looked like the adjustments in the agreement are positive, the market source said.

“LatAm credits traded sideways today. I would describe low-beta names unchanged, and high-beta names were about 50 cents to a point lower in price” as investors awaited the Fed announcement, the market source said.

Low-beta names include sovereigns such as Chile and Mexico.

In the primary market, Honduras’ Banco Atlantida SA was in focus regarding whether market conditions are strong enough for it to price its proposed five-year senior unsecured notes (expected ratings: /BB-/B) for up to $350 million.

Fixed-income investor meetings were wrapping up on Wednesday, meaning Thursday would be the likely time for the deal to price, a New York-based market source said.

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