Americas

Brazilian state-owned oil company Petrobras is to continue its deleveraging process by using cash to buy back up to $3bn of existing bonds, giving first priority to euro and sterling paper.

Two Latin American companies announced bond roadshows this week, with a third launching a tender that will require a new issue, as the region’s issuers flock to the low rate environment and gradually rehabilitate disappointing issuance volumes.

Pampa Energía followed YPF into the international bond markets on Tuesday as Argentine issuers returned after a 14 month hiatus. Investors believe there is scope for certain corporates and even provinces from the country to take advantage of renewed market access.

The US high grade corporate bond market was becalmed this week, as no issuers brought new deals before Thursday's July 4 holiday. However, the market is in good shape for issuers, and bankers and investors are hoping for two more big M&A fundings, in the telecoms and IT sectors.

The Latin America primary bond market was quiet this week thanks to dollar investors instead enjoying the US Independence Day holiday, but bankers say sentiment is at its strongest at least since January 2018 as several of the region’s issuers lined up roadshows.

Canadian Imperial Bank of Commerce (CIBC) issued its first euro covered bond in well over a year on Wednesday and was able to reap the benefit of its rare appearance by pricing a €1bn eight year flat to its curve.

It has been a sensational couple of weeks in emerging markets, with money flooding in and asset prices climbing ever higher, but the influx of new money is driving down yields further than some investors feel is justified.

The G20 meeting in Japan ended as well as those in markets could have expected. The US and China may have agreed to delay additional tariffs against the other but none were removed either. Investors are beginning to plan for a more sustained period of hostility between the two countries.

Colombian utility Empresas Públicas de Medellín (EPM) will begin fixed-income investor meetings on Thursday and could issue dollar bonds for the first time in 10 years as part of a $1bn-equivalent deal to refinance debt.

Mexican leasing company Docuformas is likely to turn to bond markets in the coming weeks, GlobalCapital understands, after announcing a tender offer and consent solicitation for its existing notes.

Bond market participants in Argentina say that more issuers from the country could look to pre-empt election-related uncertainty and take advantage of benign fundraising conditions after Pampa Energía followed in YPF’s footsteps with a 10 year deal on Tuesday.

Canadian Imperial Bank of Commerce (CIBC) has mandated leads for its first euro covered bond since January 2018.