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.
“The bonds are up a point but not three, as investor tenders may not get taken,” he said.
The company is targeting any and all of US$51.3m of outstanding 11.250% 2021s and up to US$650m of its 6.875% 2019s, 8.375% 2018s and 9.500% 2020s.
The issuer will prioritize the 2019s, followed by the 2018s and then the 2020s. It has capped the size of the transaction to US$500m but has the option to upsize it by US$150m.
Elsewhere, bonds issued by Pacific Exploration also advanced up to a point when the E&P credit announced that lenders had granted covenant waivers on some US$1.4bn of loans extended by banks including Bank of America and HSBC.
While waivers are effective for just three months, they give the company some breathing space to enter discussions with banks and address concerns about low oil prices.
Mexico’s state-owned Bancomext wrapped up roadshows last week through Bank of America Merrill Lynch and HSBC to arrange meetings with fixed-income investors ahead of a potential US dollar-denominated 144A/Reg S bond sale.
Mexican white-goods manufacturer Controladora Mabe has finished investor meetings through Barclays, Bank of America Merrill Lynch, Citigroup and JP Morgan. Ratings are BB+/BB+.
Mexican real-estate investment trust Fibra Uno has completed meetings with investors through Bank of America, Credit Suisse, HSBC and Santander.
Terrafina, another Mexican REIT, has also finished meeting accounts as it markets a potential US$400m-$500m bond offering. The borrower mandated Barclays and Citigroup as lead managers, with Itau coming in as co-manager. Expected ratings are Baa3/BBB-. (Reporting by Paul Kilby; Editing by Marc Carnegie)