Market tone strong as EM sees busy primary; Uruguay prices $1.1 billion; Venezuela quiet

By Rebecca Melvin

New York, Sept. 8 – Market tone in the emerging debt capital market in the Latin America region improved this past week amid generally better currencies bolstered by lower U.S. Treasury yields, a market source said.

Right now Latin America is attractive, and the tone is optimistic. The long end of the curve is well supported and even expensive, but the optimism has promoted flows there, an economist said.

Uruguay’s new $1.1 billion equivalent of 8 ½% peso-denominated notes capped off a busy, holiday-shortened week in the primary market.

Elsewhere in Latin America, Chile was sideways, Brazil was optimistic given an improved political tone, and Venezuela was quiet, sources said.

Two actively traded Petrobras issues were mixed on Friday, with the Petrobras 8 3/8% notes due 2021 down ¼ point to 114, while the Petrobras 7 3/8% notes due 2027 moved up to 111.8 from 111 on Thursday.

For the week, there were no real movers in the Venezuela curve and with only 2017 and 2020 Petroleos de Venezuela SA moving in a notable way. The 2017 and 2020 notes crept a little higher by 1 to 1½ points, a market source said, leaving the PDVSA 2020 notes at about 75 and the PDVSA 2017s at about 91½ on Friday, the source said.

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