Slovenia sells notes; oil prices put pressure on energy bonds; Brazilian scandal affects Lat-Am

By Christine Van Dusen

Atlanta, July 21 – Slovenia sold notes on a Tuesday that saw oil prices dip, putting some pressure on energy company bonds from China and pushing spreads for some Latin American credits wider.

Asian bonds traded on Tuesday morning unchanged to 3 basis points tighter, a London-based trader said, with the curves for China-based Cnooc Ltd. and China Petroleum & Chemical Corp. (Sinopec Group) widening by a couple of basis points before recovering back to unchanged.

“Financials are a touch firmer,” he said. “Korea was calm.”

In other trading, prices for sovereign bonds from Ukraine have moved about ¼ point down on slightly lower offers so far this week, said Fyodor Bagnenko, a fixed-income trader with Dragon Capital.

“The rest of the market was quiet, with interests in quasi-sovereign banks,” he said.

Looking to the Middle East, spreads were mixed, with some demand seen for the belly of the Dubai curve, as well as for some Dubai-based corporates, another trader said.

Investors in Latin American debt have become “a little guarded” as a result of scandal-related choppiness in Brazil, a New York-based trader said. High-grade names from Brazil were trading very infrequently, he said.

On Monday, Brazil-based Braskem SA’s chairman was indicted for allegedly participating in corruption related to Petroleo Brasileiro SA (Petrobras).

“Braskem is much weaker,” a trader said. “Petrobras continues to widen, for the third straight day.”

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