LatAm credits end off intra-day highs
By Davide Scigliuzzo
NEW YORK, May 6 (IFR) - Latin American credits barely managed to stay in positive territory at the end of a particularly negative session Wednesday for equities and US Treasuries.
Federal Reserve Chairwoman Janet Yellen warned early in the day about possible risks, including high stock valuations, but a back-up in rates seemed to have the most overall impact.
Although some LatAm credits were giving back gains by the end of the day, however, traders said the tone was generally positive for the region's bonds.
"Generally the market was trading very well today," said a sovereign bond trader in New York. "We had decent flows, but we are going out a bit weaker."
Brazilian sovereign bonds were 3bp-5bp tighter in spreads, a touch less than the 5bp-7bp tightening seen earlier, but still outperforming Peru, Uruguay and Chile, which closed flat.
A new issue from tequila giant Jose Cuervo stole much of the spotlight in the corporate space, after a mix of emerging markets and crossover investors placed more than US$5bn in orders for the company's debut US$500m 10-year issue.
The notes, which priced at a final spread of 165bp over Treasuries, tightened slightly in the secondary to end the day quoted at 161bp-167bp.
"If it had come at 175bp it would have performed even better," one trading desk analyst told IFR. Continued...