Aziz Sunderji News
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Petroleo Brasileiro SA, which sold a combined $13 billion of bonds in the first quarters of 2011 and 2012, is holding off on issuing new debt as borrowing costs rise to the highest in two years versus investment-grade peers.
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Credit investors are being “poorly compensated” for price volatility, sideling buyers until the fourth quarter, according to analysts at Barclays Capital.
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Two new measures of default risk on emerging-market debt start trading today along with the latest series of existing corporate and sovereign benchmarks.
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The rally in bonds from Mexico’s highest-rated companies is turning into a rout as Europe’s debt crisis causes investors to shun all emerging-market assets.
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Signs the global economic recovery is faltering and Europe’s fiscal crisis is spreading added to investor concern that banks will have difficulty in clawing back the $2.4 trillion they’re owed by that region’s most indebted nations.
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The cost of insuring against losses on European bank bonds soared to a record, surpassing levels triggered by the collapse of Lehman Brothers Holdings Inc., as the sovereign debt crisis deepened.
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An index of credit-default swaps insuring against losses on European bank bonds is heading for the biggest monthly drop since April 2008.
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The cost of insuring against losses on European financial bonds fell to the lowest level in eight weeks on optimism stress tests may boost confidence in the region’s banks.
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Investors are paying record-high premiums to insure against default on European sovereign bonds relative to corporate notes as governments struggle to reduce fiscal deficits while companies repair balance sheets.
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Company bonds will rally throughout 2010 as cash-rich European investors seek out riskier assets on optimism a sovereign default has been avoided and that banks are now able to fund themselves, according to Barclays Capital.
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