EM LATAM CREDIT: Petrobras (PETBRA; Ba1pos /BB /BB) Fitch Rating
“Fitch Affirms Petrobras' IDRs at 'BB'; Outlook Stable” – FitchRatings
Neutral for spreads
• Fitch affirmed Petrobras’ ‘BB’ rating with outlook stable maintaining the same rating as the government of Brazil based on the company’s linkage to and control by the sovereign.
• The Brazil government has a 36% economic stake in Brazil based energy company Petrobras and has 50.3% of the voting rights. Petrobras has an 82.3% share of the fuel distribution market in Brazil and more than 90% of the crude oil output in Brazil, according to Statista.
• The rating agency views Petrobras’ underlying standalone rating as ‘bbb’ given the company’s large scale, long reserve life, low cost of production, free cash flow generation and low leverage.
• PETBRA 2035s issued September 2024 at 6.25%, which was about T+242bps at the time, were last quoted T+261bps which was 2 bps wide to the sovereign.
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STIR: BLOCK Update: Dec'25 SOFR Ratio Put Spread
- Total 17,500 SFRZ5 96.12/96.50 3x2 put spds Blocked, 18.5 net ref 96.44 to -.435
- Elsewhere: +6,500 0QH5 97.12/97.62 call spds, 1.0 vs. 96.525/0.05%
- -15,000 SFRU5 96.25 calls, 27.0
US STOCKS: Early Equities Roundup: Sell First, Ask (Tariff) Questions Later
- Stocks continued to trade weaker at the start of the global trade war. Sell first, ask questions later as markets have yet to experience the impact of 25% US import tariffs against Canada & Mexico, 20% on China, not to mention agriculture products starting April 2.
- Currently, the DJIA trades down 686.31 points (-1.59%) at 42503.93 (lowest since mid-Jan'25), S&P E-Minis down 86.75 points (-1.48%) at 5774.5 (lowest since mid-Sep'24), Nasdaq down 205.3 points (-1.1%) at 18144.75 (lowest since early Oct'24).
- Financial and Consumer Discretionary sectors lead the broad based, carry over decline: banks and services led laggers in the former with Citigroup -7.52%, Bank of America -7.16%, Discover Financial Services -6.85%, Capital One -6.77%, KeyCorp -6.65% and Wells Fargo -6.65%.
- Aside from cruise lines whose stocks traded -7.0-7.5%, Best Buy fell 14.01% despite beating earnings estimates as tariffs are "highly likely" to raise costs BBY's CEO said. Meanwhile, Tesla fell -6.67% and GM declined 4.2%.
- On the positive side, Health Care and Consumer Staples resisted the sell-off. Molina Healthcare +3.42%, STERIS +2.60%, UnitedHealth Group +2.18% and Elevance Health +2.05% buoyed the Health Care Sector, while Walgreens Boots Alliance +6.09%, Hershey +2.34% and Dollar General +2.14% underpinned the Consumer Staples sector.
- Earnings expected after the close include: Crowdstrike Holdings, Ross Stores, Foot Locker, Campbell's, Abercrombie & Fitch, Brown-Forman Corp, Marvell Technology and Victoria's Secret.
TRUDEAU WILL ONLY CONSIDER EXPORT TAX IF THERE'S BROAD SUPPORT
- TRUDEAU WILL ONLY CONSIDER EXPORT TAX IF THERE'S BROAD SUPPORT
