ECB move disappoints, moves spreads wider; Yapi Kredi on deck; roadshow for Medanito

By Christine Van Dusen

Atlanta, Dec. 3 – Latin American bond spreads widened into the close on Thursday as markets faltered on the European Central Bank’s increased – but, market-watchers say, still largely insufficient –efforts to prop up Europe’s economy.

Mexico’s five-year credit default swaps spreads widened to 161 basis points from 153 bps, while Brazil outperformed slightly as a result of the impeachment hearings. The latter sovereign’s CDS widened only a bit, closing at 452 bps from 450 bps.

Overall, EM bond flows are “tapering off as we finally hit another December and start thinking about putting another year of pain behind us,” a trader said. “For some this month is one to tie up loose ends, write reports and keep a low market profile. For others it’s a chance to position some risk ahead of 2016 at opportunistic levels.”

The trader was keeping his eye on the upcoming issue of notes from Turkey’s Yapi ve Kredi Bankasi AS (Yapi Kredi), which on Thursday continued its roadshow for dollar-denominated notes.

Many corporate bonds from Latin America continued to slowly move lower amid better selling on Thursday, a New York-based trader said.

Among the names that have been declining is Colombia’s Ecopetrol SA, he said.

Also from Latin America, Argentina’s Medanito SA will on Dec. 7 begin marketing a possible issue of notes, a market source said.

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