Morning Commentary: Latin American bonds suffer after Argentina default; Chexim trades better

By Christine Van Dusen and Aleesia Forni

Atlanta, July 31 – Most bonds from Latin America moved wider on Thursday morning on the news that Argentina had defaulted for the second time in 12 years.

Brazil’s Petroleo Brasileiro SA (Petrobras) moved out the most, a New York-based trader said, with dollar prices dropping significantly since Wednesday’s open.

Mexico’s Cemex SAB de CV also suffered, he said.

“Bids pulled way back on that curve,” he said.

And Colombia’s Grupo Aval Acciones y Valores SA, Colombia’s Ecopetrol SA and Brazil’s Braskem SA saw prices fall.

Looking to Asia, spreads were mostly mixed during the morning, though the recent offering from Export-Import Bank of China (Chexim) was trading better.

A market source quoted the bank’s $1.5 billion of 2½% notes due 2019 at about 3 basis points tighter at 89 bps bid.

The notes due 2019 priced at 99.506 to yield Treasuries plus 90 bps.

The company’s $1.5 billion of 3 5/8% notes due 2024, which sold at Treasuries plus 120 bps, were quoted 1 bp better at 118 bps bid.

The Beijing-based lender sold the $3 billion offering on July 24.

Meanwhile, primary activity in the emerging markets space remained mostly quiet to open Thursday’s session.

© 2015 Prospect News.
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