EM LATAM CREDIT: Colombia: Geothermal Energy Projects - Neutral
(COLOM; Baa3/BBneg/BB+neg)
(ECOPET; Ba1/BBneg/BB+neg)
"Colombia to Open Tender for Geothermal Energy Projects: Petro" - Bbg
The Petro administration continues to push the alternative energy agenda and prohibit new fossil fuel exploration.
Ecopetrol has been expanding its operations in alternative energy projects and in some cases partnering with large, global generators like AES. Please see our previous post for more information:
https://mni.marketnews.com/44G1buH
Renewable energy projects have tended to be more focused on wind so this emphasis on geothermal is interesting.
COLOM 8% 2035 were last quoted T+335bp, 29bp tighter since March 31st and 3bp wider YTD. Ecopet 2036s were last quoted T+437bp, 14bp tighter since March 31st and 8bp wider YTD.
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EQUITIES: Triple Witching Option Expiries
Still looking ahead to Next Week's Equity Option Expiry in Notional Term, these will of course change and the focus will be on Gamma Flows at expiry.
- SPX: $3.31T.
- NDX: $117.51bn.
- Amazon: $19.66bn.
- Apple: $24.26bn.
- SX5E: €328.50bn.
- SX7E: €21.16bn.
- DAX: €83.88bn.
- UKX: £26.25bn.
US TSYS: Post-CPI SOFR/Treasury Option Update, Rate Cut Pricing/Hedging
Post-CPI SOFR & Treasury options volume gains, option desks reporting two-way puts, vol sales and buying in 5Y midcurve calls. Projected rate cut pricing back in play vs. morning levels (*) as follows: Jun'25 steady at 0.0bp, Jul'25 at -4.6bp (-3.6bp), Sep'25 at -19.7bp (-16.6bp), Oct'25 at -32.6bp (-28.1bp), Dec'25 at -49.4bp (-43.1bp).
- SOFR Options:
- -6,000 SFRN5 95.75 puts, 1.0
- +4,000 SFRU5 95.50 puts, 0.5 ref 95.84
- -3,000 2QH5 96.37 straddles 72.5 ref 96.37
- -2,500 SFRZ5 95.25/95.50/95.75 put flys, 3.5 ref 96.07
- +4,000 SFRZ5 97.00 calls, 6.0 ref 96.06
- Treasury Options:
- +10,000 wk1 FV 109/110 call spds, 5
- -5,000 TYQ 112 calls 23 ref 110-17.5, 5.84% appr implied vol
- 1,500 TYN5 109.52/109.75 put spds
EQUITIES: Looking Forward to the Roll Pace
EQUITY ROLL PACE: This should start to pick up into next Week, triple Witching is Friday the 20th.
- SPX: 6%.
- NDX: 3%.
- DOW: 2%.
- VGA: 4%.
- DAX: 2%.
- FTSE: 2%.
