September is expected to be a heavy month of new bond issues by Latin American companies and governments.
Issuers likely to return to the international markets after the summer break include Gerdau, the Brazilian steel company, which has mandated Citigroup and HSBC for a perpetual bond aimed at Asian retail investors, jumping on the bandwagon started by Mexico's Pemex last year.
Pemex also has $800m to raise internationally to complete 2005's funding needs, and is likely to consider the US dollar market or possibly yen, if swap spreads are attractive.
The company's new financing team, headed by managing director of finance Esteban Levin, will also consider liability management exercises to smooth out heavy amortisations due from 2008 onwards.
With the exception of Mexico, which has already covered 2006's amortisations, a spate of prefunding is expected from the Latin governments, beginning in September .
Venezuela has completed $1.25bn of its $3bn funding needs for 2006 and this week its congress approved another $2.9bn of financing.
Colombia has $2bn to raise in 2006 and Peru $1bn.
Brazil has $9bn of funding earmarked for international markets for 2006 and 2007. It has announced a two year rather than a one year funding programme, to ease the pressure in 2006, an election year.
Even so, it has only done about $200m of prefunding for next year and like other sovereigns, is keen to return to the market now that US Treasury rates are moving more definitely upward.
There are also rumours that Brazil is considering a possible perpetual bond issue for Asian retail investors.
Other likely Brazilian issuers include Eletrobras, which has just mandated Dresdner Kleinwort Wasserstein for a $300m bond.
Ecuador says deal in offing
Ecuador's new economy minister, Magdalena Barreiro, confirmed this week that the country still hoped to issue a $500m five year bond with an 8.5% coupon, only part of which will be sold to the Venezuelan government.
Venezuela has agreed to buy $300m of the deal, and Ecuador aims to sell a further $200m to local or international investors.
She said the deal could take about six weeks to come to market.
Barreiro also made efforts to distance herself from the hostile stance taken by her former boss, ex-minister Rafael Correa, toward multilateral lending organisations.
She said she would receive an IMF mission on August 21, and said that in spite of the World Bank's recent cancellation of a $100m loan, there was about $60m-$80m of World Bank lending still in the pipeline.
Chavez on collision course
Venezuela's decision to strengthen ties with its Latin American neighbours by buying their debt comes as President Hugo Chavez continues to distance Venezuela from the US.
This week Chavez suspended agreements with the US Drug Enforcement Administration after accusing the agency of spying.
The DEA had been working with the Venezuelan National Guard to control drug smuggling through the Colombian border.
In early April Chavez also decided to suspend joint military officer training agreements with the US.
"The concern is that Chavez seems to be on a deliberate path to completely sever all ties with the US government, exacerbating the already difficult relationship," said Andrews Ortiz, an analyst with JP Morgan in New York.
Trinidad reaps energy bonus
Moody's upgraded Trinidad and Tobago from Baa3 to Baa2 this week, as the Caribbean country continues to reap rewards from its burgeoning oil and gas sector.
"Trinidad and Tobago's external payments position provides the strongest support to the government's rating," said Moody's. "Energy exports and sizeable foreign direct investment should enable continued accumulation of foreign exchange reserves over the next few years, strengthening the country's position as a net external creditor."
The energy windfall has left the Trinidad government on track to record a 5% primary fiscal surplus this year, even while it pays money into an oil stabilisation fund.