EM LATAM CREDIT: Mexico's Televisa (TELVIS; Baa3neg/BBB/BBB-neg) 4Q Earnings
Fourth Quarter Earnings Results
Negative for spreads
• Mexico telecom/media company Televisa reported disappointing earnings and a special charge for its Sky satellite business. TELVIS 2049 bonds widened 34 bps over the past three months, last quoted T+ 290bps and ranging from T+255-298bps.
• Revenues declined 6% due to a loss of video and cable tv subscribers, especially in their Sky satellite division. The company produced a net loss of MXN9.8bn for the year while total debt increased 13%, primarily due to the negative impact of the depreciation in the Peso on US dollar denominated debt. Cash generation was positive and the cash + investments position increased 38% y/y to MXN48.7bn (USD2.4bn) which should be adequate to meet near term maturities.
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US TSYS: Decent 20Y Bond Auction Re-Open Helped Treasuries Bounce Off Lows
- Treasuries look to finish weaker Wednesday, off midday lows after the $13B 20Y Bond auction finally broke a string of poorly received sales, trading 1bp through: 4.900% high yield vs. 4.910% WI; 2.750x bid-to-cover vs. prior month's 2.50x.
- Lite data session: MBA composite mortgage applications increased 0.1% last week (sa) to consolidate the 33% jump the week prior; US DEC. LEADING INDICATOR FALLS 0.1% M/M; EST. -0.1% (Bbg).
- Late short covering saw the Mar'25 10Y contract trades 108-20 (-3.5) vs. 108-14 low, well above initial technical support at 108-00/107-06 (Low Jan 16 / 13 and the bear trigger). 10Y yield gained .0122 to 4.5886, curves flatter: 2s10s -.050 at 29.961, 5s30s -2.161 at 38.997.
- Pres Trump’s tariff threat towards Russia weighed on Treasuries earlier in the session while underpinning US$ (BBDXY +.08 t 1302.69 late). Higher core yields have also been supportive of this price dynamic, while a 4bp move for 5-year treasury yields also provided support to the broader dollar index.
- Cross asset roundup: Spot gold has risen by a further 0.4% to $2,756/oz on Wednesday, bringing the yellow metal to its highest level since October 31. WTI lost some ground on the day, with outages on the US gulf coast bearish for oil. However, it has struggled for clear direction, with earlier movement driven by Trump comments towards the war in Ukraine. WTI Mar 25 is down by 0.5% at $75.4/bbl.
US TSYS: Late SOFR/Treasury Option Roundup
Large Sep'25 SOFR put fly & various Mar'25 10Y Treasury put flows carried over from overnight. Projected rate cuts through mid-2025 running largely steady vs. this morning's levels (*) as follows: Jan'25 at -0.1bp, Mar'25 at -6.4bp, May'25 at -11.9bp (-12.4bp), Jun'25 at -21.6bp (-22.7bp), Jul'25 steady at -26.1bp.
- SOFR Options:
- +7,000 0QG5 96.25/96.31 call spds, 1.0 ref 96.01
- +10,000 SFRH5 95.62/95.68 2x1 put spds, 0.25
- +5,000 SFRN5 94.87/95.25 put spds, 4.5 vs. 95.95/0.10%
- +3,000 SFRM5 95.62/95.75 put spds, 3.75 vs. 95.895/0.10%
- +5,000 0QN5 94.87/95.25 put spds, 4.5 vs. 95.99/0.10%
- +7,000 SFRU5 96.06/96.31 call spds 7.25 ref 95.98
- +4,000 0QM5 96.31/96.56 call spds vs. SFRM5 96.00/96.25 call spds 1.5 net flattener
- +2,500 2QM5 97.00/SFRM5 96.56 call spd, 0.5 flattener
- 2,650 0QU5 96 straddles, 39.5
- 8,000 SFRH5 95.87/96.00 call spds ref 95.76
- 42,000 SFRU5 95.37/95.62/95.87 put flys ref 95.975
- 1,600 SFRZ5 95.25/95.43/95.75 broken put trees ref 96.02
- Treasury Options:
- Block, 11,000 TYH5 113 calls 1 vs. 108-08.5/0.03%
- +50,000 TYH5 102 puts, 1 ref 108-18, total volume over 55,000
- 2,500 TYJ5 110.5/112.5 call spds vs. 104.5/106.5 put spds ref 108-25
- over 10,400 TYH5 107.5 puts, 19 last
- over 9,300 TYH5 106.5 puts, 9 last
- over 8,900 TYH5 108.5 puts, 41 last
- 2,500 TYH5 103/104.5/107 broken put flys ref 108-20.5
- over 1,900 USH5 112 puts, 51 last
US TSY FUTURES: BLOCK: March'25 2Y Sale
- -8,000 TUH5 102-22.38, sell through 102-22.5 post time bid at 1454:19ET, DV01 $300,000. The 2Y contract trades 102-22.25 last (-1).
