EM bonds grapple with ‘maddening volatility’; Lat-Am spreads widen; Oman, Russia eye deals

By Christine Van Dusen

Atlanta, Feb. 9 – Spreads for Latin American bonds moved wider – as Asia remained on holiday and oil prices remained low – then staged a small recovery amid “sluggish” trading on a Tuesday that was full of “maddening volatility.”

“It was more maddening volatility on Tuesday, as a midday equity rally helped turn some of the Latin American market positive, though overall benchmarks were mixed on thin holiday volume,” he said.

Five-year credit default swaps spreads for Brazil finished Tuesday at 486 basis points from 484 bps, while Mexico’s moved to 219 bps from 213 bps.

“Cash prices end about 10 cents to 30 cents lower on the day, with the back end outperforming on United States Treasury long-end strength,” another trader said. “Latin American high yield moves lower on the day, with both Venezuela and Argentina lower.”

Indeed, Venezuela’s 2027s were down to 37 from 38, PDVSA’s 2017s closed at 42 from 42.25 and Argentina’s Bonar 2024s traded at 107.50 from 108.30.

In deal-related news, Oman is looking to issue between $5 billion and $10 billion of bonds, a market source said.

Market sources were also whispering about possible dollar issues from Egypt and Uruguay.

Russia is seeking bookrunners for an issue of up to $3 billion of bonds that should come to the market this year, a market source said.

© 2015 Prospect News.
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