LATAM WRAP-LatAm credits recover ground in shaky market

Tue Sep 29, 2015 4:07pm EDT
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By Paul Kilby

NEW YORK, Sept 29 (IFR) - LatAm credit was on slightly firmer footing Tuesday but still susceptible to price swings, as investors continued to fret about global growth and Brazil's economic crisis.

Brazilian credits, which have been at the center of the recent sell-off, showed signs of stabilizing, with sovereign five-year CDS ending some 4bp tighter at 523bp.

The CDS hit a wide of 570bp on Monday.

"It seems like the selling has subsided," said a New York-based trader.

State-owned oil company Petrobras's 2024s were quoted some 50 cents higher at 67.00-68.00 despite fears of more forced selling among high-grade accounts unable to hold the junk-rated credit.

"Once investment-grade selling is done, we expect accounts will commit capital to Petrobras bonds," said a second trader.

Brazilian beef company Marfrig also enjoyed a rally after launching a tender for up to US$700m of its outstandings, using proceeds from the sale of its European food unit Moy Park.

Marfrig bonds climbed 1 to 1.5 points - perhaps not as much as the tender price justified, the trader said, given that the offer prioritized some bonds over others depending on demand.   Continued...