Colombia

Colombia on Wednesday became the second Latin American issuer this week to announce a European roadshow, although the sovereign is understood to be still pondering over the currency of its next bond.

Colombia’s sovereign bonds closed tighter on the day on Tuesday despite lower oil prices driving Standard & Poor’s to place the government’s BBB credit rating on negative outlook.

Energy investor EIG has extended the deadline for its tender offer on the outstanding senior notes of troubled Colombian-Canadian oil firm Pacific Exploration & Production after receiving a lacklustre response from bondholders.

A return of dollar issuance from Latin America edged closer on Thursday as details emerged of planned project bonds from Colombian toll road concessionaire Pacifico 3.

Energy investor EIG said that bondholders of Colombian-Canadian oil firm Pacific Exploration & Production faced a “de minimis” recovery after the company said on January 15 that it would not make scheduled coupon payments this month.

Colombian state owned oil company, Ecopetrol said it wanted to reiterate its commitment to cost cutting and protecting its cash flow after Moody’s left it perilously close to losing one of its investment grade ratings.

Heavily indebted Colombian-Canadian oil company Pacific Exploration & Production disappointed some bondholders on Friday by announcing it intended to miss coupon payments due this month and use the 30 day grace period “to assess strategic alternatives”.

Movements in Pacific Exploration & Production’s share price left investors confused after the company announced it had brought in Lazard as a financial advisor and was seeking covenant relief on its loans.

Fitch has cut the credit rating of Pacific Exploration and Production (formerly Pacific Rubiales) by two notches from B+ to B- and placed the issuer on rating watch negative after the agency revised its oil price outlook.

Sellside bankers desperate to generate business in a stormy LatAm debt market will have been pleased. For as a lesson for issuers in the benefits of sacrificing a few basis points in the interests of getting a deal done, Colombia’s long 10 year on Monday was as good as they come.

Latin America bankers observing Colombia’s latest bond issue had no complaints about execution but said that the deal was evidence of the higher concessions that the region’s issuers must pay amid EM and commodity-related volatility.

The issuer formerly known as Pacific Rubiales fell just one notch away from triple-C status on Wednesday after Moody’s downgraded the borrower by three notches from Ba3 to B3 and kept it on negative outlook.