Petrobras, Brazil get attention; Motherson suffers from Volkswagen scandal; PCA preps deal

By Christine Van Dusen

Atlanta, Sept. 23 – Some risky assets firmed up on Wednesday, despite the equity sell-off in Asia, as investors kept a close eye on Brazilian corporate paper and India-based Samvardhana Motherson Automotive Systems Group BV.

Asian credits ended their session on Wednesday mixed, with investment-grade bonds unchanged to 3 basis points wider, a London-based trader said.

“Most of Korea was firm,” he said. “India closed unchanged after opening wider, with European buyers in 10-year corporates. Malaysia was unchanged to 5 bps wider.”

Sukuk from Malaysia, he said, remained well bid.

Meanwhile, India-based Samvardhana Motherson Automotive Systems had investors wondering whether the components supplier would suffer under the weight of the Volkswagen investigation.

The option adjusted spread for Motherson’s 2021s has moved out to 506 bps.

Brazil remained on radar screens on Wednesday after managing to trade fairly well on Tuesday “despite the debacle in the [currency] and the meltdown in Brazilian corporates,” a New York-based trader said.

Brazil-based Petroleo Brasileiro SA saw high volume and liquidity on Tuesday, another trader said, and hovered near the previous day’s close. And Vale SA was very quiet after tightening as much as 30 bps last week.

In deal-related news, Autoridad del Canal de Panama, also known as the Panama Canal Authority (PCA), set talk in the Treasuries plus 230-bps area for its upcoming issue of $450 million 20-year amortizing senior unsecured bonds, a market source said.

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