Brazil

Brazil’s emphatic return to international bond markets on Thursday was likely designed to encourage its non-sovereign issuers to the market, said Lat Am bond bankers, although some questioned whether these deals would materialise.

Votorantim Cimentos, the cement making arm of Brazilian conglomerate Votorantim SA, will buy back just €120m of its euro denominated bonds after most bondholders rejected the terms of a proposed tender offer. The company was hoping to buy back €350m.

The arrest of former Brazilian president Lula da Silva gave new urgency to a strong rally in Brazilian bonds on Friday after the market appeared to take the detention as a sign that president Dilma Rousseff was closer to impeachment.

Brazilian cement company Votorantim Cimentos is looking to buy back up to €350m ($380m) of debt, using the proceeds of a cash injection from its holding company to become the latest issuer to take advantage of the poor performance of Brazilian bonds.

Hypermarcas, the Brazilian pharmaceutical company, will not extend the early bird deadline on the tender offer for its 6.5% senior notes due 2021 after bondholders responded positively to the buy-back offer.

Brazilian bonds rallied on Wednesday afternoon after the country's treasury secretary told local press that the sovereign was considering buying back foreign bonds in what DCM bankers said was likely to have been a deliberate response to a ratings cut from Moody’s in the morning.

A strong performance in Brazil’s bond curve on Wednesday underlined how unsurprised bond investors were to see Latin America’s largest sovereign receive yet another rating downgrade.

Dollar bonds from Latin America remained elusive this week as global market turmoil kept borrowers on the sidelines.

Markit is preparing to launch what it said will be the first tradable emerging markets interest rate swap index.

The pain continued for the Brazilian steel sector on Friday as leading producer Gerdau suffered the loss of its first investment grade rating.

Steelmaker Companhia Siderurgica Nacional (CSN) could be the next major Brazilian corporate to be forced into a debt restructuring, Fitch Ratings has warned.

Fitch downgraded Odebrecht Offshore Drilling Finance (OODF) from B- to CCC on Monday, highlighting its concerns that the Brazilian issuer’s discussions with bondholders could lead to a restructuring of its bonds.