Credit comment

You could not have missed the 100yr PETBRA bond. It described the market beautifully: a 100-yr maturity but just a tad longer than the PETBRA 44s in duration, and less riskier  than the 44s because of its lower dollar price (came @$81) – a fact missed by most market pundits. The book ran up to $7bb as buy-side folks scrambled to get the yield. Gone from investor’s minds were worries about the health of PETBRA nor its numerous investigations pending from bribery and payoffs. 

On the sovereign side of such a coin, Greece continues to dance with creditors, getting around a June 5th IMF payment by utilizing a loophole to pay instead, at the end of the month – another push back on liabilities. In more staid news, employment numbers domestically strengthened convictions that Fed would raise in September.


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