Americas

Latin America global local currency issuance, one of the biggest casualties of the so-called 'taper tantrum' that rocked EM bond markets in 2013, is back on the agenda as dollar yields plummet.

A requirement looming next week for major banks in the US to begin posting initial margin on uncleared swaps has prompted a chaotic scramble to comply with the deadline, said observers, while also elevating concerns about the preparedness of the rest of the market to meet future mandates. Dan Alderson reports.

Bankers are braced for a bumper September of corporate dollar issuance as M&A funders look to tap the market amid huge demand for high grade paper.

Colombia’s dollar bonds did not budge on Wednesday after the announcement of a successful conclusion of four years of peace talks, but investors and analysts said the news was crucial for the approval of a tax reform needed for the sovereign to maintain its credit rating.

UBS and three other banks are working together to apply blockchain technology to making payments and settling transactions in financial markets.

Activity is ramping up in emerging markets with several mandates coming through this week. While the unrelenting buying of the asset class continues, idiosyncratic risks are a reminder of the volatility that can arise.

Standard & Poor’s said on Tuesday that there was at least a one-in-three chance of Mexico receiving a downgrade to its BBB+ rating within the next two years, although bond markets showed no reaction to the announcement.

DCM bankers covering Colombia said they expect the South American sovereign to issue in the autumn despite announcing on Tuesday it would increase local market bond sales by Cp8tr ($2.74bn) this year.

The World Bank’s debut IMF special drawing rights (SDR) bond — dubbed a Mulan bond — is an acknowledgement of China’s success in reforming the renminbi, George Richardson, the organisation’s director and global head of capital markets, told GlobalRMB.

The unpredictability of economic policies in the US and Europe, paired with increasing default rates, could hit investors in the US high yield market, said Markov Processes International on Tuesday.

Colombian oil company Pacific Exploration & Production’s board of directors said on Monday night that it continued to prefer Catalyst Capital’s original restructuring proposal, which could be approved in a Canadian court on Tuesday, to an alternative bid made last week.

Pesquera Exalmar, the Peruvian fishmeal farm, has extended the deadline of a tender offer and consent solicitation on its 7.375% bonds due 2020 from August 19 to August 30 as it seeks bondholder approval for a new senior secured loan.