Central America

CMI Energía (CMI), the renewable energy subsidiary of Central American conglomerate Corporación Multi Inversiones, is looking to debut in international bond markets with a senior secured green deal two and a half years after pulling its first attempt.

Mexico cleaned up a chunk of short-term debt maturities on Tuesday with a $3.26bn 2041 bond. The country’s deputy finance minister told GlobalCapital that the sovereign had decided to act fast to issue amid expectations that US Treasury yields will widen further.

Mexico’s deputy finance minister Gabriel Yorio told GlobalCapital on Wednesday that a block of Latin American countries was forming to ensure that the plight of middle-income economies was not forgotten as the world looks for ways to alleviate financial pressures on developing countries.

Mexico on Tuesday became the second Latin America sovereign to use the 20 year US Treasury bond as a benchmark for a new issue, initially raising $2.5bn of 2041 notes to finance a tender offer. Later in the evening, the sovereign said it would likely increase the size of the 2041s to $3.26bn, with holders of old bonds set to switch into the new notes.

Grupo Bimbo, the Mexican food company that says it has gained millions of new customers during the pandemic on the way to posting record sales and Ebitda, will prepay $600m of global bonds maturing in 2022 using proceeds from a bank loan.

Two Mexican corporates — real estate investment trust (Reit) Fibra Uno and leasing company Operadora de Servicios Mega — re-opened bonds on Thursday as supply trickles into the Latin American primary bond market. But only Fibra Uno was able to tighten pricing from initial price thoughts.

A group of investors owning a portion of Belize’s only international bond are forming a bondholder committee and are hosting an investor call on Friday as the highly indebted Central American sovereign prepares yet another debt restructuring.

Operadora de Servicios Mega, the Mexican leasing company, began investor calls on Tuesday as it looks to raise up to $150m via a re-opening of its only international bond.

The International Monetary Fund said in the concluding statement of last week’s Article IV mission to Belize that the government needs to restructure its debts to restore public debt sustainability, leaving bondholders bracing for a fifth credit event since 2007.

Fitch downgraded Mexican broadcaster TV Azteca from C to restricted default (RD) on Friday after the 30 day grace period expired on a missed coupon payment. The rating agency is forecasting recoveries for bondholders in the 31%-50% range.

Covid-19 has made combining market-friendly economic policy with retaining popular support even trickier than usual for Latin America's politicians. In turn, it has become harder for bondholders to read the political tea leaves when weighing up where their money is best parked. For instance, investors who once loved Jair Bolsonaro's Brazil are now high-tailing it to other markets, including El Salvador, where another populist has just won power. In a busy year for LatAm elections, and with the pandemic still raging, allocating capital in the region's bond markets will be trickier than usual.

Fitch Ratings said on Wednesday that it would continue to provide international ratings and research on Mexican government-owned oil giant Pemex even after the issuer said it was dispensing with the agency’s services. Previously, Mexican president Andrés Manual López Obrador had publicly criticised Fitch’s negative rating actions on Pemex, which accounts for nearly 10% of investor holdings of EM corporate bonds.