Brazil, Panama do deals; ECB sets off ‘whipsaw’ session; Lat-Am tightens; roadshows ahead

By Christine Van Dusen

Atlanta, March 10 – Brazil and Panama sold notes on Thursday as risk assets managed gains – with spreads tightening for some Latin American names – even as the European Central Bank’s announcements made for a “whipsaw” session for the larger markets.

The ECB cut its main rate and its bank deposit rate while also expanding its quantitative easing program.

“Whipsaw day for global markets,” a trader said. “But Lat-Am external sovereign credit manages to etch out some small gains.”

Indeed, Brazil’s five-year credit default swaps spreads closed at 392 basis points from 402 bps, while Mexico’s moved to 171 bps from 172 bps.

“Cash prices were initially higher but close mostly unchanged as Treasury and commodity weakness subdue recent enthusiasm,” he said. “Lat-Am high-yield finishes mixed on the session, with Argentina mostly unchanged and Venezuela weaker.”

In deal-related news, Azerbaijan’s Southern Gas Corridor CJSC set out on Thursday for a roadshow to market a benchmark-sized issue of dollar-denominated notes, a market source said.

Republic of Indonesia on Thursday embarked on a roadshow to market a dollar-denominated issue of Islamic bonds, a market source said.

And Korea National Oil Corp. has mandated Citigroup, Credit Agricole CIB, Goldman Sachs, HSBC, JPMorgan and the Korea Development Bank to arrange a roadshow beginning March 14, a market source said. An issue of bonds is expected to follow.

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