EM LATAM CREDIT: Prio: Tender Offer Results – Positive
(PRIOBZ; Ba3pos/NR/BB*+)
• Brazil independent oil and gas E&P company Prio used proceeds from its issuance a few days ago of USD700mn 5NC2 notes to tender for up to USD600mn 2026 notes, of which USD431,267,000 were validly tendered.
• PRIO 2030s were last quoted $99.83, 6.79%, priced at 6.75%. We saw fair value at 6.875% and did think pricing was a bit aggressive for an independent E&P company, albeit one with a strong credit profile as a fast-growing, low-cost producer.
• Consider also the fallout from the decline of Braskem and Ambipar bonds which has triggered higher yields on some other Brazil high yield names of about 50bp in the past two weeks, potentially unjustified. It raised the question of how much is that stronger credit profile for PRIOBZ worth relative to other issuers in Brazil high yield credit.
• Please see our post on Brazil steel, iron ore and cement company CSN from a few days ago: https://mni.marketnews.com/48h9Lnn
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EURIBOR OPTIONS: Recent Euribor Trades
Recent Euribor trades highlight divergences in opinion in the path for ECB policy rates:
- Put strips: ERZ5 97.9375 put, ERZ5 97.875 put, ERH6 97.9375 put and ERM6 97.8125 put. Paper pays 4.25 for 2k.
- ERH6 98.125/25 call spread, paper pays 4.25 for 4k
US TSY FUTURES: BLOCK: Dec'25 2Y Sale
- -5,000 TUZ5 104-15.88, post time bid at 0816:35ET, DV01 $208,000.
- The 2Y contract trades 104-16 last (+.62)
US: MNI POLITICAL RISK - Trump Edges Closer To New Russia Sanctions
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- At 10:10 ET 15:10 BST, President Donald Trump will deliver remarks to the White House Religious Liberty Commission.
- Treasury Secretary Scott Bessent said Trump's economic policies need more time, following Friday's soft jobs report. Bessent downplayed the impact of Trump’s tariff agenda on US manufacturing jobs.
- Bessent warned that the US would have to refund half of the tariffs it has collected if it loses a case challenging Trump’s emergency declaration at the Supreme Court.
- BRICS countries will meet virtually today to dicuss the impact of Trump's tariffs.
- The already-strained relationship between Washington and Seoul took another hit after hundreds of South Korean workers were swept up in an immigration raid in Georgia.
- A new Pentagon strategy report is expected to put domestic considerations above countering adversaries.
- The implied probability of a government shutdown on October 1 ticked up to roughly 50%.
- Senate Majority Leader John Thune (R-SD) will today take the first step of a 'nuclear option' to advance executive branch nominees.
- The US and EU appear closer to coordinating new sanctions on Russia, but political obstacles may undermine the process.
- Trump issued a ‘last warning’ to Hamas as Israel initiates a new military phase in Gaza City.
- IAEA Director Rafael Grossi said there is "still time" for a nuclear deal with Iran.
- Poll of the Day: The Trump Administration has declared more emergencies than any of its predecessors.
Full Article: US DAILY BRIEF
