Brazil

South Africa is experiencing a difficult week in credit markets, with credit default swaps that reference its debt hitting their widest point for two years.

Brazilian refractories and minerals producer Magnesita Refratarios will buy back over three quarters of its outstanding bonds after a tender expired at the end of last week.

Whether prices in Brazilian bonds really have found a floor or not, several bond investors say they are now finding value in the country’s debt markets after a sustained sell-off was halted by a better-than-expected downgrade from Moody’s this week.

Ukraine’s sovereign debt restructuring, Argentinian primary elections and a potential Turkish coalition government are keeping debt bankers alert while the primary bond market takes its summer break.

For the second time in two weeks a negative rating action on the Brazilian sovereign triggered a positive reaction in the country’s securities after Moody’s downgrade the country from Baa2 to Baa3.

Brazil’s rapidly falling currency may be a symptom of ever increasing economic pain in Latin America’s largest economy, but it is lending a helping hand to the country’s exporters — in particular food company BR Foods (BRF).

Iochpe Maxion, the Brazilian group that makes more vehicle wheels than any other company in the world via its Maxion Wheels division, said on Friday that it is considering turning to cross-border bond markets for financing.

Spain is often held up as an example of how austerity works, and Markit data published on August 5 provides some support to this view.

Bond market participants were left pondering whether the sell-off in Brazilian assets had been exaggerated after a negative outlook from Standard & Poor’s triggered a rally and stabilisation in credit spreads in the country.

Credit default swaps referencing Brazil hit their widest levels of the year this week, with the continuing crash in commodities weighing heavily on those names most exposed and adding to a raft of other woes for the country.

The recent commodity downturn has sent LatAm corporate bond yields surging, just as the US looks set to raise interest rates.

CEEMEA supply is stumbling, with the week’s tally at one deal priced and one deal pulled. But Latin American offers hope of more fresh paper, with Mexican, Brazilian and Caribbean corporates all readying deals.