LatAm Bonds

This week’s Eurozone crisis summit is unlikely to satisfy investors and end the volatility that has paralysed markets in recent weeks, bond players said on Thursday afternoon. Key steps including committing to an aggressive European Central Bank buying programme, clarifying fiscal union and transforming the European Financial Stability Facility into a bank seem remote amid continuing political wrangling.

Ten Moody’s-rated speculative grade issuers defaulted in November, leaving the trailing 12 month global default rate for junk credit at 1.8%.

null

Petrobras, the Brazilian national oil company, completed the second leg of its European funding exercise today with a £700m 15 year issue that was priced at 370bp over Gilts.

Brazilian quasi-sovereign Petrobras made a stylish debut in the euro market on Thursday with a dual-tranche deal that brought high grade investors out in force.

Analysts from Citigroup argued on Friday that RMBS issuance costs were now between 12% and 35% less than for covered bonds, which could push more issuers into the market in the months ahead. The average saving under Citi’s assumptions was 24%, with the greatest benefit for lower-quality banks.

null