Oil prices hurt EM bonds; civil charges filed against Vale; Eastern Property prices notes

By Christine Van Dusen

Atlanta, Dec. 11 – Emerging markets bonds continued to feel the pain of falling oil prices on a quieter Friday, with wider spreads for most names in the asset class and sellers seen for Latin American notes.

“The oil price drop is still a strong factor for the decline in emerging market assets,” according to a report from Schildershoven Finance BV. “We don’t expect any positive industry dynamics in the nearest future.”

Oil prices continue to be depressed by headlines from the Organization of Petroleum Exporting Countries, which said that production rose to a three-year high in November, a London-based strategist said.

“Last Friday, OPEC members failed to agree on an effective production ceiling, among others, because Iran’s output will surge once the sanctions are lifted,” he said. “This morning, the IEA said that it expects the oil glut to continue until at least late 2016.”

On Friday morning, five-year credit default swaps spreads for the sovereign were trading at 350 basis points. They were trading at 290 bps on Wednesday evening, he said.

From Latin America, prosecutors are bringing civil charges against Brazil-based Vale SA, BHP Billiton and their iron ore mine, Samarco, after a dam burst last month and killed 13 people.

This came as Vale and BHP decided not to sign an accord.

Separately, Russia-focused Eastern Property Holdings Ltd. sold $50 million of nine-year bonds at par to yield 6¾%, according to a company announcement.

© 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.