Primary hosts Russia, Three Gorges, Etihad; Lat-Am performance improves; Turkey falters

By Christine Van Dusen

Atlanta, May 24 – Russia, China Three Gorges Corp., China Construction Bank Corp., Abu Dhabi’s Etihad Airways Partners, Buenos Aires and Dubai’s Noor Bank PJSC sold notes on Tuesday as better sentiment, driven by a rally in equities and commodities, helped credits from Latin America move tighter and higher.

Five-year credit defaults swaps spreads for Brazil closed on Tuesday at 356 basis points from 362 bps, while Mexico’s moved to 177 bps from 182 bps.

“Cash prices were under some pressure for a good chunk of the day, as U.S. Treasury weakness pressured low-beta bonds,” a New York-based trader said. “We did see a nice end-of-day bounce, which coincided with Treasuries paring some losses from the intraday lows hit just prior to the two-year auction.”

High-yield names from the region were firmer on the day, he said.

Venezuela’s 2027s closed at 43 from 42.25, PDVSA’s 2017s ended at 69.50 from 66.15, and Argentina’s Bonar 2024s closed at 109.875 from 109.50. The sovereign’s new 2026s ended the day at 103.65 from 103.10.

“Flows picked up a bit today from yesterday, with two-way inquiry,” he said.

“We start slightly weaker into the day, driven by lower oil prices and some U.S. dollar strength,” a London-based strategist said. “Turkey credit opens circa 5 bps wider on cash while credit default swaps trade at 284 bps, 2 bps wider.”

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