Brazil

Brazil became the third Latin American issuer in three days to find bond buyers willing to place large orders even as pricing was pushed below their initial demands, as it raised $3.5bn of five and 10 year paper to provide arguably the starkest example yet that technicals are trumping fundamentals primary emerging market new issues.

State-owned oil and gas giant Petrobras finally brought some bond supply from Brazil on Wednesday but, as the new issue traded down on the break, bankers said few Latin American issuers were likely to be persuaded of the benefits of tapping international markets in the short term.

Investors and bankers said that Petrobras had achieved exceptionally tight pricing on Wednesday as the oil and gas giant became the first Brazilian issuer to tap international bond markets in times of coronavirus amid a strong rally in corporate paper from the country.

Alantra is buffing its credit portfolio advisory team with the addition of Marcus Evans and Christos Stefanidis, who will join as managing directors in the UK and Greece. The credit portfolio advisory firm is also opening up offices in Latin America and China.

Rating agencies say that senior unsecured bondholders in Latam Airlines face bleak recovery prospects after the Covid-19 pandemic forced the largest airline in Latin America to file for Chapter 11 bankruptcy protection in the US.

Investors say that bond markets are wide open for many Brazilian companies, but even as access to credit has suddenly become a major topic for the country's corporate executives, most of the cash-rich companies they run are shying away from international markets and betting that they will be able to achieve better borrowing terms in the future than are on offer today.

Rating agencies have continued their policy of taking swift action on Latin American governments as Standard & Poor’s removed its positive outlook from Brazil, the region’s largest economy, citing political opposition to President Jair Bolsonaro as a key reason.

China’s importance in global pulp and zinc markets puts pulp producers Suzano and Arauco — alongside Peruvian miner Volcán — among the Latin American corporates most vulnerable to the coronavirus (Covid-19) outbreak, according to Fitch Ratings.

Latin American bond bankers are putting on brave faces as the Covid-19 epidemic threatens to thwart what several sell-side houses say is an exceptionally busy March pipeline.

As volatility finally hit Latin American primary markets, the only action from the region’s issuers this week came through liability management, with Peruvian miner Nexa and Brazilian airline Gol both prepaying bonds.

Global market volatility triggered by fears surrounding Covid-19 outbreak, finally hit Latin America bonds on Monday just as bankers said they are preparing another heavy wave of issuance.

Brazilian airline Gol said on Friday that it would be redeeming in March a bond it had tried — and mostly failed — to repurchase a year ago.