Risk-off mode persists for most of session; Greek bonds falter; KOKS, Colombia seek issues

By Christine Van Dusen

Atlanta, June 16 – Weakness persisted for many emerging markets bonds on Tuesday as uncertainty about Greece’s debt situation kept investors cautious.

“All eyes are on the Fed tomorrow, with Greece also an ongoing catalyst, triggering market volatility,” a New York-based trader said.

“We are wider this morning as the risk-off tone prevails,” a trader said.

Latin American bonds moved 2 basis points to 3 bps wider in the morning, with five-year credit default swaps spreads for Brazil widening to 252 bps from 250 bps, and cash prices drifted lower as U.S. Treasuries fell off their highs.

Chile’s Cencosud SA remained consistent, with two-way activity and some liquidity for the 2023 and 2025 bonds, another trader said. The company’s 2045s were the quietest during the session.

The curve for Colombia’s Ecopetrol SA remained under pressure, as expected, given that its curve tends to suffer during a market downtrade, a trader said.

And Latin America-focused Pacific Rubiales saw its curve slip as supporters of the takeover by Alfa SAB de CV and opponents mailed out dueling proxies, he said.

In deal-related news, Russia’s KOKS Group is looking to issue $350 million of notes due in 4˝ years via Citigroup, Renaissance Capital and Sberbank.

And Colombia is looking to issue more than $3 billion of international bonds in 2016, a market source said.

© 2015 Prospect News.
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