Brazil

Meatpacker Minerva sold the first Brazilian cross-border bond since renewed corruption allegations against Brazilian president Michel Temer shook the market last month, tapping its 2026s for a further $350m.

Moody’s followed Standard & Poor’s in placing Brazil’s credit rating on negative outlook on Friday, but both agencies have reaffirmed Petrobras’ rating as analysts say they expect the state-owned oil company to gain ground on its sovereign parent.

LatAm bond market participants said contagion from the latest Brazilian corruption crisis had dissipated this week as new issuance returned to the region and spreads recovered within and outside Brazil.

S&P became the first ratings agency to react to the latest corruption scandal in Brazil on Monday, but some large investors already think the market has overreacted to the news.

Corruption accusations made overnight on Wednesday against Brazilian president Michel Temer threw EM bond markets into turmoil just as they had already suffered a torrid day on the back of a Donald Trump-provoked slump in global markets.

What, on Wednesday, seemed to be primary capital markets gung-ho for any deal imaginable by Thursday looked more like a market on the skids as concerns intensified over the endless controversies dogging US president Donald Trump’s administration.

Latin America bonds did not emerge unscathed from the carnage in broader markets on Wednesday as several weeks of strong appetite for EM bonds were interrupted by the biggest US stock sell-off in eight months.

Emerging markets bond bankers can think of nothing to derail the ongoing bull-run and while this might point to hubris, this week’s trades have given no indication of fatigue.

Bond investors in Latin America appear happier to be stretched by tight pricing than hairy credit quality after Brazilian state oil giant Petrobras pulled off an exceptionally tight bond return on Monday.

Brazilian electricity company Cemig will return to bond markets towards the end of the month. It had failed to garner sufficient investor interest before its earnings numbers went stale.

Recent developments in Latin American new issue markets may have shown just how risk-tolerant the market has become, but there are signs that investors may be fighting back.

Brazilian government-owned development bank BNDES sold a long-awaited green bond on Tuesday, with a combination of scarcity value and SRI investor support ensuring tight pricing.