Some sellers emerge amid mixed tone in EM debt market; S&P downgrades Pemex

By Rebecca Melvin

New York, March 4 – There were some sellers of emerging markets debt on Monday, leaving the market with a lightly mixed tone, according to a market source.

Investors continue to watch prospects for a U.S.-China trade deal, and absences in the EM primary calendar continue to be mostly supportive of secondary market spreads.

No new mandates for Latin America or the Central & Eastern Europe, Middle East and Africa region were heard on Monday. The calendar contains a couple of deals for Turkish corporates and a deal on the road for Russia fertilizer company EuroChem Group AG. Prospects for further issuance from Russia remains a question mark.

Meanwhile, negative rating news hit Petroleos Mexicanos SAB de CV, as S&P said it revised the stand-alone credit profile on the heavily-indebted state-owned oil company to B- from BB-, and downgraded the global scale rating outlook to negative from stable.

S&P said the moves were due to a persistent deterioration of the company's business and financial risk profiles that has compromised the recovery of its upstream and downstream activities. The government's financial support also falls short of the company's multi-annual capital investment needs, the agency added.

Pemex’s 6½ notes due 2027 fell more than a point to 97.9 on Monday, from a previous close of 99.1 on the Luxembourg Stock Exchange.

But the longer-dated Pemex 6¾% notes due 2047 were mostly flat at 94.89 on Monday.

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