Americas

This week in Keeping Tabs: how to transition the US economy off fossil fuels.

A pair of sovereigns privately placed century bonds this week, with one of the borrowers — Ireland — dipping below the 1% point for the first time at this sort of tenor.

As Uruguay looks to follow a recent surge of sustainability-themed bond issuance from Latin American borrowers with an ESG bond of its own, one of the options it is weighing up is a sustainability-linked bond — a format that has so far only been used by corporate borrowers.

Amid increasing concern that Argentina might delay a new IMF agreement until after mid-term elections in October, one of the creditor groups that negotiated last year’s sovereign debt restructuring issued a plea to the government to turn its economic policy around.

Mexican petrochemicals producer Alpek shrugged off a sharp sell-off in US Treasury yields earlier in the week to notch a highly oversubscribed 10 year bond in the only public benchmark new issue from Latin America this week.

US corporate bond bankers have shrugged off concerns that the steepening of the US Treasury curve could spell problems for credit, after the 10 year yield closed at 1.29% on Wednesday and the 30 year broke though 2%.

South Korean e-commerce firm Coupang is set for a multi-billion-dollar New York IPO — the first US listing from the country for a decade. The deal structure could appeal to other Korean start-ups, bankers said this week. Jonathan Breen reports.

Mexico petrochemical company Alpek could announce a new 10 year note as soon as Thursday, and investors expect the issuer to receive strong demand amid a quiet Latin America primary market.

CPPIB Capital made a strong return to the 10 year part of the euro curve on Wednesday, with a book over two times covered and a new issue premium of just 1bp. Bremen also hit the euro market, selling €500m of 30 year paper through its curve.

Mexican petrochemicals producer Alpek, which lost one of its investment grade ratings for the first time last September, was holding calls with fixed income investors this week ahead of a proposed liability management exercise that would push its average debt maturity from 4.4 years to seven years.

Banco Santander Chile sold its first ESG-themed bond on Tuesday, raising $50m in a private placement with a Japanese investor to finance small and medium sized enterprises led by women.

The size of a covered bond liquidity buffer that protects investors against the risk of payment disruption should be an important risk consideration, but there is no incentive to play safe as regulatory and central bank treatment of the asset class play more pivotal roles in valuations.