LatAm corporate credits slide on currency weakness
By Davide Scigliuzzo
NEW YORK, March 10 (IFR) - Latin American credits extended losses on Tuesday as traders struggled to find buyers in the midst of a currency rout and a 3% slide in oil prices.
"If I look at my screen I see offers on every corporate bond," said a broker in Miami. "It is still extremely difficult to find bids."
Weakness in a number of emerging market currencies, with the Mexican peso hitting an all-time low of 15.65 to the dollar, was the main driver of the sell-off in credit, said the broker.
Corporate bonds were bearing most of the brunt, ending the day some 25 to 75 cents lower in price, with oil-related names such as Colombia-focused Pacific Rubiales underperforming.
"With (WTI) oil (prices) back below US$50 (a barrel), we saw better selling in the afternoon," said a New York-based trader.
Pacific Rubiales 2025s, for example, were last spotted at a bid price of 66.5, or two points lower on the day.
Among the few credits bucking the trend was Mexican infrastructure company Empresas ICA, which saw its 8.875% 2024s rise 50 cents to a cash price of 76.
"I think the (ICA) bonds looked relatively cheap and over the last week or so more people started paying attention," said the trader. Continued...