LatAm Bonds

Syndicate bankers say that larger than normal new issue concessions being paid by US investment-grade corporates in bond markets mean Latin American borrowers are in no rush to get the year started.

Brazilian state oil giant Petrobras began the year finalising yet another buy-back of existing bonds, though the response from bondholders fell below the $1.5bn maximum repurchase amount set by the borrower.

Brazilian airline Gol Linhas Aéreas Inteligentes is set to continue its deleveraging process as it looks to repurchase the remainder of its bonds due in 2022.

No Latin American borrowers dared to announce bond plans in the short first working week of 2019, but a flurry of pre-Christmas requests for proposals and the prospect of habitual January issuers tapping was enough to make syndicate bankers chirpier.

El Salvador’s Congress has approved the issuance of new external debt to enable it to refinance debt due later this year. That will mean one fewer headaches for whoever wins next month’s presidential elections.

Latin American bond markets had a predictably quiet start to 2019 as DCM bankers are focussing firmly on next week for any new supply, but early signs suggested that Brazil would continue to be the outperformer.

El Salvador’s Congress has approved the issuance of new external debt to enable it to refinance debt due later this year. That will mean one fewer headache for whoever wins next month’s presidential elections.

Mexico’s new president Andrés Manuel López Obrador (Amlo) is free to proceed with his proposed cancellation of Mexico City’s new airport after bondholders agreed to waive clauses that would have triggered an event of default.

Battling a host of problems — local and global — Latin American bond markets suffered a torrid 2018. Many issuers stayed away, high yielders struggled to find financing and investors booked losses. With more volatility expected, political developments in LatAm’s three largest economies could make or break the region’s bond markets in 2019. Oliver West reports.

Bond and currency markets rallied on Monday after Mexico’s new president Andrés Manuel López Obrador (Amlo) presented a budget that Fitch said marked a continuation of Mexico’s existing fiscal framework.

Bond market participants mostly welcomed news that Ecuador had signed a loan with China last week, with some stating that the government’s fiscal adjustment left the sovereign’s bonds looking attractive despite a negative outlook from Moody’s.

NiQuan Energy Trinidad Ltd, the owner of a gas-to-liquids plant in Trinidad and Tobago, held its final conference calls on Thursday and appears to represent the Lat Am DCM market’s last hope of primary activity in 2018, with most bankers now looking towards January.