Central America

Latin American bond bankers believe that Tuesday’s triple tranche bond issue from Pemex is likely to have been the last cross-border deal of the year from the region, even though the bonds provided further encouraging signs with a strong aftermarket performance.

Mexican state-owned oil giant Pemex responded to Mexico’s impressive first competitive deep-water oil auction by reminding investors of its prowess in markets with a $5.5bn triple tranche bond.

Latin American issuers again showed no interest in cross-border new issue markets this week as Mexican retailer and financial services company Grupo Elektra said it would use domestic bonds to prepay dollar bonds.

The government of El Salvador finally looks ready to issue a much needed international bond to refinance short dated debt, but there is concern that the deal will be only a temporary solution to the country’s liquidity problems.

Market participants are expecting tense discussions after Belize’s government said it would look to restructure its 2038 “super” bond even though there is some debate as to whether a restructuring is really necessary.

Senior Latin America DCM officials at some market-leading bookrunners said this week that they feared there would be no more dollar issuance from the region in 2016, although a couple of dissenting voices thought one or two issuers may “panic” and attempt to issue.

Central American development bank Cabei added a 20th currency to its bond issuance portfolio on Thursday with a 10 year debut in Australian dollars as niche currencies dominated the post-US election activity in Latin America.

Creditors of Central American sovereign Belize are understood to have formed a committee to deal with a possible second restructuring of the government’s bonds in four years.

Central American development bank Cabei will look to price its first Australian dollar bond on Thursday after announcing price guidance of 180bp over ASW for a proposed 10 year deal.

After a slight recovery in Latin American credit markets on Wednesday, Latin American bond bankers said the region’s borrowers should be ready and waiting to issue as soon as a window becomes available.

Just one-fifth of Mexican corporate bond issuers are likely to escape unscathed from US president-elect Donald Trump's proposed trade protectionism policies, said Fitch on Monday.

Central American sovereign Belize could be forced into a restructuring or exchange of its so-called “super-bond” due 2038 after it said it was looking to meet bondholders to discuss the country’s “serious economic and financial challenges”.