Americas

Mexico returned to familiar territory by becoming the first Latin American borrower of the year to issue bonds on Monday. The format, however, was less familiar, as the 50 year SEC-registered $3bn bond — launched at around 11am New York time — will be listed on the stock exchanges of both Luxembourg and Taipei.

Growth stocks are overvalued relative to value stocks, according to Ben Inker, head of asset allocation at GMO. But in fixed income markets he is less convinced of a bubble, with central banks compressing yields.

Canadian issuers are expected to concentrate on building their regulatory buffers in 2021 mainly with dollar senior issuance with bankers suggesting that analysts’ covered bond supply forecasts for next year, which are considerably above €10bn, are overly optimistic.

The US stimulus package seemed all but a done deal until Tuesday night. The $900bn, 5,593 page bill was passed by both houses and requires only President Donald Trump’s signature to become law. Though this seemed a foregone conclusion, Trump is threatening to withhold his signature unless the size of the relief is increased, not that bond markets seemed fazed by the late upset.

Gol, Brazil’s largest domestic airline, has priced a $200m six year private placement. This is one of the first deals from a Latin American airliner since the pandemic struck, and comes after a number of peers in the region have fallen into bankruptcy.

Equity investors have begun in recent months to allocate capital away from some of the high growth firms which dominated equity capital market supply this year to more cyclical companies that are set to benefit when economies reopen from Covid-19 lockdowns. They are also looking to buy into emerging markets, predicting rising equity valuations in places like Russia and some parts of Latin America.

In what is likely to have been the final Latin America new bond issue of 2020, Paraguayan beef exporter Frigorífico Concepción added $21m to its January 2025s in a small tap on Friday.

This week in Keeping Tabs: Republicans battle over Federal Reserve support, a look back at the "Spanish" flu, and a quiz from the Bank of England.

Governments have had little choice but to load up on debt to save their economies. With the crucial support of low interest rates and vast quantitative easing programmes, there is little immediate threat to debt sustainability. But as Jasper Cox reports, nothing lasts forever.

Despite funding stresses in certain Latin American countries, bond markets will continue to help the region with its financing needs. For now, this eases the pressure for reform and fiscal consolidation, but issuers must eventually face up to political and social turbulence. Oliver West reports.

Primary bond markets in Latin America and CEEMEA finally took some rest this week after a busier than usual December, but bankers covering both regions expect emerging markets borrowers to be fast out of the blocks in January as EM credit looks continued to benefit from low rates.

An extraordinary year for the US corporate bond market ended on a high this week, as Jerome Powell gave a dovish statement at the end of the Federal Open Market Committee's meeting which left participants certain the Fed had the market's back.