Latin America sees secondary market strength; Petrobras outperforms; EM primary mostly quiet

By Rebecca Melvin

New York, June 26 – Existing bonds in emerging markets enjoyed a positive tone on Monday, albeit on light volume, while the new issue market was very quiet as attention started to turn to upcoming summer holidays in the United States and elsewhere.

Brazil saw a nice move up on Monday, a New York-based trader said. The credit was up ½ point to ¾ point across the board, including both short- and long-dated paper.

Petroleo Brasileiro SA was outperforming the sovereign curve, but both were better, the trader said.

Argentina and Venezuela were also higher on Monday’s session.

Argentina’s new century bond due in 2117 was quoted up at 93.85 bid, 94 offered, which represented another lift from a week ago when $2.75 billion of the notes were issued.

Venezuela’s bonds, which had been down sharply for the month so far on Friday, recouped a ¼ point or so on Monday. The bonds of Venezuela’s state-owned oil company Petroleos de Venezuela SA bonds were also better.

In the primary market, banks queried said there were no new issues to report on Monday, but there were deals being worked on that might be in the market as soon as Wednesday.

In Europe, the Middle East and Asia, things were equally slow as summer holidays loom in the northern hemisphere.

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