Central America

Scarcity value for long dated high yield paper and expectations of curve flattening helped El Salvador sell more than $1bn of 30 year paper in a highly oversubscribed deal on Tuesday amid strong bond markets.

Latin American new issue volumes are rapidly catching up with last year’s totals and bond bankers expect some activity to continue during the usually quiet August period as borrower-friendly conditions endure.

Mexico responded to the lower rates environment on Tuesday with an opportunistic $3.56bn liability management exercise, shrugging off any credit worries to issue at a very slim concession.

Mexico showed that even trickier credit stories could take advantage of the borrower-friendly rates environment, surprising many with a $3bn liability management exercise just two weeks after finance minister Carlos Urzúa resigned.

Central American sovereign El Salvador will begin meeting bond investors on Wednesday as it looks to issue its first international bond under president Nayib Bukele.

Debt capital markets bankers say more Mexican companies could rush to bond markets, as strong conditions for issuance outweigh the increasing concerns surrounding the direction of the country's economy.

Mexican leasing company Docuformas offered a double-digit yield on its return to bond markets but was able to issue twice the amount of its last deal, offering its first index-eligible bond in the process.

Real estate investment trust (Reit) Fibra Terrafina sold $500m of 10 year bonds on Monday, with hefty tightening allowing the borrower to price closer to its largest Mexican rival than expected.

Debt capital markets bankers covering Mexico do not expect the resignation of finance minister Carlos Urzúa on Tuesday to affect incoming bond issues though they acknowledge that his departure could create uncertainty.

Two Mexican companies announced bond roadshows on Monday, in combination with buybacks of 2022 notes, as Latin American borrowers continue to try to use liability management to take advantage of low rates to refinance debt.

Two Latin American companies announced bond roadshows this week, with a third launching a tender that will require a new issue, as the region’s issuers flock to the low rate environment and gradually rehabilitate disappointing issuance volumes.

Mexican leasing company Docuformas is likely to turn to bond markets in the coming weeks, GlobalCapital understands, after announcing a tender offer and consent solicitation for its existing notes.