December 17, 2015 / 9:39 PM / 2 years ago

LATAM WRAP-Modest recovery for Brazil after downgrade

NEW YORK, Dec 17 (IFR) - Latin American credits rebounded on Thursday as Brazilian corporates caught a bid after coming under selling pressure the previous day in the wake of the sovereign’s downgrade to junk.

Notes issued by BTG Pactual jumped as much as 3.5 points after Brazil’s Federal Supreme Court ordered the release of the bank’s founder Andre Esteves.

The company’s 2016 were ending at a cash price of around 90, having rallied by more than 20 points from their lows earlier this month, according to a New York-based corporate bond trader.

Esteves was arrested on November 25 on suspicion of obstructing a sprawling corruption investigation at state-controlled oil company Petrobras.

Petrobras and Vale bonds were also better bid and ending the day up by roughly a point, helped by a strong open in local equities and a rally in US Treasuries.

Elsewhere, Argentina’s dollar-denominated bonds bounced after the country’s new government let the peso plunge more than 26.5% as part of a slew of market-friendly reforms.

The sovereign’s Discount notes were last quoted at a mid-price of 114.5, up 1.5 points on the day, while the Pars were ending at 62.75 after posting slightly more modest gains, according to a New York-based broker. (Reporting by Davide Scigliuzzo; Editing by Marc Carnegie)

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