Issuers, investors react to Yellen remarks; Rio Tinto inquiry heats up; JBS to deleverage

By Christine Van Dusen

Atlanta, Nov. 18 – Emerging markets issuers remained on the sidelines on Friday as investors digested Federal Reserve Chair Janet Yellen’s latest remarks and continued considering the implications of a Donald Trump presidency in the United States.

Meanwhile, the investigation into London-based Rio Tinto plc – which has iron ore mines in Latin America – picked up steam after the former mining minister of Guinea agreed that corruption had occurred.

In response, the company’s bonds continued to decline, with the 2025 notes trading at 3.3%.

“Currently, spreads to the base curve remain almost unchanged,” the report said. “Possible acceleration of the investigation may trigger further correction.”

Also from Latin America, Brazil-based JBS SA reported that it will focus on deleveraging in 2017. The meat producer recently released an earnings report that showed a decline in three of the last four quarters. JBS is also struggling with legal troubles, as its leaders have been suspended as part of a fraud investigation.

“Latin America’s bond market was multidirectional yesterday,” a market source said. “Investors should be prepared for volatility, as there are a lot of possible triggers for its acceleration.”

In trading, Latin American high-yield names finished more or less unchanged, he said, with Venezuela’s 2027s traded at 49¾ bid, 50¾ offered on Friday, up from last month’s 44¼, a trader said.

© 2015 Prospect News.
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