Primary hosts Poland; oil prices dictate tone for EM; Lat-Am outperforms; Lebanon eyes bonds

By Christine Van Dusen

Atlanta, April 13 – Poland sold notes on Wednesday as oil prices at first reversed their rally, then stabilized, creating “the perfect mix for an absolute rip-fest in emerging markets credit,” a trader said.

Oil prices remain volatile, rebounding strongly on Tuesday, then moving downward on Wednesday morning before rebounding again. All of this movement shows how “fragile” prices are and how they so easily “move on headlines,” a strategist said.

Also coloring the picture on Wednesday was Tuesday’s news that the International Monetary Fund had revised its global growth forecasts downward.

Looking to Latin America, some profit-taking was seen on Wednesday but buying remained consistent, a New York-based trader said.

Brazil-based Vale SA was “moon-bound,” he said, “up another two to three points through the curve.”

Most other Brazilian corporates, he said, were gapping higher. Braskem SA was the exception, moving up only a little bit.

But many credits from the region were quiet on Wednesday morning, the trader said.

Late in the day, sovereign credit spreads for Latin American names moved “relentlessly tighter and higher on the day,” another New York trader said.

In deal-related news, Lebanon has mandated Blom Bank, Byblos Bank and Deutsche Bank as bookrunners for an issue of $1 billion or more of eurobonds, a market source said.

The Regulation S deal is expected to price this month.

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