LatAm Bonds

Mexican state-owned oil company Petróleos Mexicanos (Pemex) was the highlight of a difficult start to the week for Latin American bonds. But though news of a new $8bn loan allowed it to outperform the market, analysts warned its troubles were far from over.

Gran Tierra Energy, the Canada-listed oil and gas company that mostly operates in Colombia, held investor meetings and calls on Friday as it plots its second-ever international bond deal.

Latin American bond bankers believe primary market activity will pick up next week after a volatile week led some banks to postpone previously scheduled mandate announcements.

Venezuelan government-owned oil giant Petróleos de Venezuela (PDVSA) is likely to make a $71m interest payment on its 2020 notes, the only external bond on which the country has not yet defaulted.

Paraguay tapped bond investors on Thursday to finance its portion of the transcontinental road, raising $732.3m of amortising notes with an average life of 8.9 years and using a zero coupon structure to reflect project payment flows.

A securitization that repackages Paraguayan government infrastructure financing is expected to be priced on Thursday after the bookrunner set initial price thoughts the day before.

Latin America’s best rated sovereign, Chile, will begin investor meetings on Thursday as it plots its third Euroclearable local currency deal.

Just one Latin American issuer has announced bond issuance plans as another day of market volatility had bankers pondering whether the favourable conditions that have prevailed almost uninterrupted since mid-January might be in danger.

There was little action in Latin American bonds on Monday as the UK took a bank holiday, but broader volatility in global markets sent most spreads in the region slightly wider and was enough to make some DCM bankers nervous.

Emerging market bankers and investors have been reacting to this week's attempt by the Venezuelan opposition to unseat president Nicolás Maduro, with some worrying that Russia's support for the government once again raises the risk of sanctions against that country.

The risk of a Cristina Fernández de Kirchner winning the presidential election in Argentina has spooked investors, causing the currency to sell off and bond prices to slump. But the weakening economy is bolstering support for president Mauricio Macri’s rivals, causing what investors are calling a “toxic feedback loop”.

Two Latin American borrowers are expected to come to market for dollar bonds on Thursday, having both completed roadshows. The dovish tone of the US Federal Reserve will have bolstered the deals "at the margin", said an investor.