Americas

Governments of low income countries will need private capital to finance infrastructure projects if they are to meet the Sustainable Development Goals by 2030, according to a report from the International Monetary Fund. Phil Thornton reports

US sanctions have brought secondary markets in Venezuelan sovereign bonds and those of state oil company PDVSA to a standstill, leaving investors unable to trade. As a result, the bonds may be withdrawn from the JP Morgan Emerging Markets Bond Index.

High yield bonds for auto parts manufacturer Adient slipped more than three points on Thursday as the company tweaked its loan covenants and produced disappointing numbers. The firm’s new management is taking aggressive action to turn the group around and says it needs the financial headroom to do so.

The dollar issuance calendar continued to smoulder with a handful of borrowers enjoying bulging order books and pricing leverage as investors continued to return in force to high-grade credit. With corporate earnings still acting as a handbrake and the Chinese New Year further dampening activity, supply was steady rather than spectacular.

Brazilian airline Gol found it difficult to prise its bonds out of investors’ hands with a tender offer in January, receiving only 14% take-up. CFO Richard Lark said it indicated investors’ positive sentiment towards Brazilian credit in general and Gol in particular.

Investors are waiting feverishly for regime change in Venezuela. With US sanctions having stopped trading in the sovereign bonds and those of state oil company PDVSA, investors are unable to alter their exposure to the country.

Corporación Andina de Fomento (CAF) may be playing it safe with its first dollar benchmark of the year, according to investors, amid uncertainty over the political future of Venezuela — one of its shareholders and the country in which it is headquartered.

Corporación Andina de Fomento (CAF) will break the silence of the public sector dollar market this week, after circulating initial price thoughts on Tuesday for its first benchmark of the year in the currency.

Analysts at the research house CreditSights expect that Canadian banks could soon start issuing more senior bonds for their total loss-absorbing capacity requirements (TLAC), having held back from the market after taking care of their funding needs with older forms of senior debt.

Latam Airlines returned to the bond market for the first time in almost two years, printing $600m of seven year paper.

Paraguay came to market on Monday for a 30 year bond on Monday, picking three banks to run the books for its longest bond ever.

Goldman Sachs has held off from rewarding some retired executives compensation until “more information is available” on the 1Malaysia Development Berhad scandal.