Morning Commentary: Petrobras paper active, under pressure; Nostrum prices $400 million notes

By Rebecca Melvin

New York, Feb. 9 – Some emerging market credits in Latin America were under pressure early Friday after a raft of new paper for that region priced on Thursday and as investor caution causes some portfolio shifts in the face of volatility this past week in the broader markets.

There was a lot of trading in Brazil’s Petroleo Brasileiro SA paper, a New York-based trader said early Friday.

Petrobras’ ultra-long dated 6.85% notes due 2115 were trading actively and extending losses from Thursday. Those notes were crossing in the range of 91.5 and 92.25 on Friday, which was down about 0.5 point to 1 point on the day, following a 3-point to 3.5-point slide on Thursday, according to Trace data.

A near-dated Petrobras note, its 6 1/8% notes due 2022, was faring better. They were last trading around 104.25 and 104.5, after closing out on Thursday at 105.1, which was down only 0.4 point, according to Trace data.

Vale SA was another name in trade early Friday.

The primary has been healthy. In addition to Latin America deals priced for the Dominican Republic and corporates like Unifin Financiera, SAB de CV Sofom, ENR and Companhia Siderurgica Nacional SA, other regions also remained in play, with Nostrum Oil & Gas plc announcing pricing of its $400 million of 7% seven-year notes at 99.32 to yield 7 1/8%.

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