Greece roils markets, but appetite for EM improves; volumes dwindle; issuers set roadshows

By Christine Van Dusen

Atlanta, July 1 – Greece remained top-of-mind for the markets on Wednesday as the country’s debt was downgraded again – this time from Caa2 to Caa3 by Moody’s Investors Service – and the prime minister pushed his constituents to vote against an international bailout deal.

Even though this created a great deal of volatility, emerging markets assets weathered the storm fairly well. Risk appetite improved, though volumes stayed low.

“This round of weakening so far has been well-maintained, though the market has been reluctant to add or panic-sell before Greece reaches resolution,” a trader said.

Bonds from Latin America-focused Pacific Rubiales Energy Corp. were very active on Wednesday morning, with prices bouncing around for the 2021s ahead of a vote on the takeover bid from Mexico’s Alfa SAB de CV and Harbour Energy Ltd.

Other Latin American debt put in a good morning on Wednesday amid a better appetite for risk, a New York-based trader said.

Trading of Asian bonds was “fairly vibrant” on Wednesday morning, even with Hong Kong out on holiday, a London-based trader said.

In deal related news, Mexico’s America Movil SAB de CV set out on a roadshow on Wednesday to market a possible issue of peso- or dollar-denominated notes, a market source said.

Oman’s Renaissance Services SAOG is on a roadshow for an issue of dollar- or rial-denominated notes, a market source said.

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