LatAm credit spreads inch tighter as investors focus on Greece

Fri Jun 26, 2015 2:47pm EDT
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By Paul Kilby

NEW YORK, June 26 (IFR) - Latin American credit were mostly tighter on light volumes on Friday with prices holding their own against weaker US Treasuries.

The yield on the 10-year US Treasury jumped to 2.47% following a retreat from safe haven assets on news that Eurozone creditors had offered to release aid in effort to cut a deal with Greece.

A successful resolution to Greek debt talks over the weekend could push US rates higher, putting further pressure on LatAm credits, said a New York-based trader.

This includes debt prices in Brazil, which have recently retreated amid speculation that Petrobras's corruption scandal could impact powerful political figures, including former President Luiz Inacio Lula da Silva.

"There is a lot of money being lost in Brazil, with guys trying to call the bottom," said a New York based trader. "What I care about is performance and price action and price action has been weak in Brazil."

Brazilian construction firm Odebrecht's 2029s continued to slip following the arrest last week of its CEO in connection with the investigation into kick-backs at Petrobras.

Those bonds were being quoted about half a point lower, but at wide bid offer of 75.50-77.00, though the company's 6.75% 2022s, backed by drillships on charter to Petrobras, were about 1/4 point stronger at 71.375-72.375.

Elsewhere, the recently minted seven-year bond from Mexican hotel chain Posadas was putting in a strong performance jumping to as high as 101.75-102.00 after pricing yesterday at par to yield 7.875%.   Continued...