Americas

Supply was light in the US corporate bond market this week, partly because the May non-farm payrolls report is due on Friday. Participants are braced for volatility after the US Federal Reserve announced on Wednesday it would start selling its holdings of corporate bonds, purchased as a stimulus measure at the height of the pandemic. It was left to Vodafone of the UK to reopen new issuance after the Memorial Day holiday.

Emerging market borrowers are flocking to the primary bond markets as ever more participants predict the US Federal Reserve will begin tapering its monetary stimulus, something that traditionally rings loud alarm bells for the asset class.

Financial institutions returned to the dollar in their droves after the memorial Day holiday, with 12 borrowers cramming more than $15bn of issuance into three days this week.

After a year-long frenzy, the primary market for US convertible bonds has cooled, following a rotation out of technology stocks and jitters over rising yields on government bonds. An injection of realism is no bad thing, however, and should be welcomed in a market that has almost doubled in size within the space of a year.

Deutsche Bank has told staff in New York that they should prepare to be back in the office by Labor Day (September 6), as the firm works on plans to allow more remote working for some in the future.

Brazilian government-owned oil and gas giant Petrobras took advantage of a buoyant market on Wednesday to clean up the long end of its curve, shrugging off political concerns with a new 30 year bond that came well inside fair value and left no doubt about the quality of funding conditions for Latin American issuers.

Brazilian oil and gas company PetroRio accessed bond markets on Wednesday just eight months after it pulled an earlier deal, with observers crediting the company’s success to an improved credit profile, enhanced note structure, higher oil prices and better bond market conditions.

Citi has hired Chuck Adams from Goldman Sachs to oversee a newly formed investment banking unit combining the traditional healthcare sector with consumer and retail coverage.

Mexican building materials company Cemex is looking to sell a perpetual hybrid bond that it believes will help it towards its target of building an investment grade capital structure.

Grupo Axo, the Mexican fashion retailer, sold $325m of five year notes on its international bond market debut on Tuesday, tightening the price as bankers said Latin America bond markets were in a sweet spot for new issuance.

Two senior leveraged finance lawyers have switched firms from White & Case to Allen & Overy in New York, following Jake Mincemoyer, who joined A&O as head of US levfin in February.

Bank of Montreal attracted good demand for a €1.25bn eight year covered bond on Tuesday and paid a modest new issue concession. The outcome was deemed a fine result given that market conditions are not at their best.