Latin American credit outperforms; India’s Oil and Natural Gas launches $1 billion notes

By Paul A. Harris

Portland, Ore., July 19 – Latin America credit outperformed the rest of emerging markets credit on Tuesday, as Turkey continued to create a drag on market sentiment, a source said.

Brazil’s five-year credit default swaps tightened by a single basis point to 289 bps bid, from 290 bps bid.

Mexico’s five-year CDS ended the New York day unchanged at 142 bps bid.

The price of the index, with a 14% Turkey weighting, was a dime lower at 93.10, down from 93.20.

Latin America high yield finished firmer on the session.

Venezuela’s state-owned Petroleos de Venezuela, SA’s (PDVSA) notes due in 2017 finished at 78 bid, up from 750 bid.

Venezuela sovereign bonds due 2027 were also higher at 51 bid, up from 49.50 bid.

In the London afternoon Turkey continued to put a drag on the market, with Turkish bank paper taking a pretty good hit, sources said.

Turkey’s Yapi Kredi cancelled its $550 million issue of 4˝% notes due July 19, 2023 on Tuesday, the day the notes were to settle, due to the turmoil in Turkish credit.

Yet the Turkish turmoil was relatively contained, according to a trader who said that the secondary market was strong during the London session.

In deal-related news, Oil and Natural Gas Corp. Ltd. launched a $1 billion two-part offering of notes (Baa2/BBB-) today, according to a market source.

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