LatAm Bonds

Two Colombian companies kept corporate issuance from Latin America ticking with aggressive deals on Wednesday even as bankers reported softer conditions in US investment grade bond markets

As private creditors continue to resist calls to participate in coordinated debt relief efforts, a group of Ecuador’s bondholders appeared to be insisting that another path was possible as they said the South American sovereign had set a positive precedent for other EM sovereign debt restructurings likely to follow in the Covid-19 era.

Chilean non-bank financial institution Tanner is joining the slew of Latin American companies turning to bond markets as it holds investor calls ahead of a proposed five year amortising note.

Argentine bonds rallied on Monday after the government surpassed expectations with a new debt restructuring offer. But markets are still waiting on the reaction of the largest bondholders, as Argentina had abandoned negotiations ahead of its updated offer.

While Argentina’s back-and-forth attitude to debt negotiations means it still has not reached a deal more than three months after the deadline it had set itself to wrap up the process, Ecuador’s decision to keep investor relations as cordial as possible could see it rewarded with a remarkably swift restructuring of its bonds.

Brazilian mining giant Vale returned to bond markets after a three year absence on Monday with a 10 year bond that bankers said left investors hungry for more.

Mexican lender Banorte and Colombia’s second largest telecoms company began investor calls on Monday as Latin American borrowers look for funding in the wake of a rally that reawakened issuer interest in bond markets.

Central American sovereign El Salvador will this week show just how far risk appetite has rebounded in emerging markets as it seeks a long-dated benchmark bond even as an inverted bond curve suggests markets are pricing a high level of stress.

After a rush of dollar issuance from Latin American sovereigns, Uruguay — the last of the region’s investment grade countries to turn to bond markets during the coronavirus pandemic — spotted the chance in late June to become the first EM sovereign to issue abroad in its own currency this year. Herman Kamil, director of the country's debt management office (DMO), tells GlobalCapital how the sovereign bucked the trend.

Suriname took a market-friendly approach to arranging debt relief this week as bondholders agreed to delay the amortisation schedule on its 2023s. But a full restructuring remains on the cards.

As tensions between Argentina and its largest bondholders climbed this week, the government’s prize asset, oil firm YPF, differentiated itself with a debt exchange that, according to rating agencies, does not punish creditors — unlike the sovereign’s proposals.

Debt capital markets and syndicate bankers covering Latin America say that there is plenty of primary market activity on the way before the end of summer, as new issuance ticked over during the shortened July 4 week.