EM LATAM CREDIT: Braskem: CADE Approves Potential Tanure Transaction - Negative
(BRASKM; Ba3/BBneg/BB+)
"Braskem Says Antitrust Body Approves Potential NSP Deal" - Bbg
We weren't expecting any friction from the Brazil competition regulator so not that significant but still it does clear at least one hurdle towards a potential transaction that could result in some sort of debt restructuring detrimental to bondholders that the market fears.
Businessman Nelson Tanure is proposing to buy a controlling stake in the fund that holds the Braskem shares owned by creditor banks as collateral for Odebrecht (aka Novonor) defaulted loans.
He has hired Rothschild to advise on a restructuring of Braskem which some people fear could result in a debt restructuring as well which we have posted on numerous times. Please see the link for more information:
https://mni.marketnews.com/4m4nstv
We think a more significant hurdle will be reaching a final agreement on the Alagoas environmental liability which Tanure has said is necessary to move forward with a transaction.
BRASKM 34s were last quoted USD76.68, about 19 points lower since March 31st and YTD.
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SOFR OPTIONS: Post-Data Flow
Call spread selling, conditional curve plays while underlying futures continue to scale back from post-data highs. White pack (SFRM5-SFRH6) trades steady to -.005. Projected rate cut pricing consolidates slightly from earlier levels (*) as follows: Jun'25 at 0.0bp, Jul'25 at -3.1bp (-3.6bp), Sep'25 at -18.2bp (-19.5bp), Oct'25 at -31.1bp (-32.6bp), Dec'25 at -47.3bp (-48.8bp).
- -10,000 0QZ5 97.50/97.62 call spds, 1.75 vs. 96.73/0.05%
- +2,500 SFRZ5 96.37/96.75 call spds vs. 0QZ5 97.25/97.50 call spd, 1.5 net/steepener
- +2,500 SFRN5 95.37/95.68 put spds, .37
- -4,000 SFRU5 95.68/95.81/96.25/96.37 call condors, 5.25 ref 95.875
EQUITIES: Lloyd's outright call seller
LLOY (20th June) 68c, sold at 8.20 and 8 in 3k.
- This could be closing, there's 3k OI at that strike.
- Also noted Yesterday, there's £3.05bn worth of Notional Option Expiry for Friday in Lloyds.
CANADA DATA: Biggest Foreign Divestment Of Canadian Bonds Since 2018
- Foreign investors sold Canadian CAD9.4B Canadian securities in April, including CAD25.1b of bonds that was the largest divestment since Dec 2018. Bond decline largely due to debt retirements.
- Canadian investors purchased CAD4.1B of foreign securities in April.
YTD foreign investment in Canadian securities from Jan to April -CAD15.1B vs +CAD64.3B over the same period last year.
