Latvia, Hydoo do new deals; oil prices continue to plummet, hurting sentiment; Lat-Am widens

By Christine Van Dusen

Atlanta, Dec. 8 – The Republic of Latvia and China’s Hydoo International Holding Ltd. sold notes on Tuesday as spreads widened for many emerging markets names amid lower commodity prices that dampened investor sentiment.

“Oil prices have dropped circa 8% since Friday’s OPEC meeting, where the organization decided to maintain its policy while acknowledging that it would ‘retain production’ close to current levels,” according to a report from Barclays Capital.

From Latin America, few prices were spotted in the early morning, “but everything there is wider by at least 5 basis points,” a New York-based trader said. “We will open weaker across the board.”

Later in the session, sovereign credit spreads remained wider, with Brazil’s five-year credit default swaps spreads moving to 467 bps from 454 bps after trading as wide as 480 bps. Mexico’s closed at 170 bps from 164 bps after trading as wide as 174 bps.

“Cash prices do weaken as U.S. Treasuries barely move and spreads widen,” a New York-based trader said. “Latin American high-yield has Venezuela continuing to weaken close to pre-election levels, with PDVSA’s 2017 at 61.10 from 61.75 and Venezuela’s 2027s at 44.25 from 45.”

“Flows were quiet, with a lack of conviction seen in either direction,” he said.

© 2015 Prospect News.
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