LatAm Bonds

Latin America syndicate bankers are dreading a moribund primary bond market this week despite the fact there are borrowers interested in issuing.

Nicolás Maduro’s comfortable and predicted victory in Sunday’s highly-questioned presidential elections in Venezuela have strengthened the president’s grip on power and reaffirmed the view of many bondholders that improvements in the crisis-stricken country are some way off.

Brazilian oil and gas giant Petrobras is asking certain bondholders to sell their paper in what would be its second $4bn tender offer of 2018.

All three major rating agencies gave a green light to Brazilian meatpacker JBS’s recent refinancing last week, saying that the new agreement with its lenders meant a significant improvement in the company’s liquidity position.

Two prospective bond issuers from Latin America cancelled their fundraising plans this week as external conditions raise borrowing costs for EM issuers.

Chilean state owned lender BancoEstado raised $200m-equivalent of debt in Asian markets this week to reach the half way mark of its $1.6bn medium-term funding needs for the year.

Mexican state owned oil company Pemex (Petróleos Mexicanos) raised €3.15bn ($3.722bn) across four tranches on Wednesday to provide some relief to a bruised and battered Lat Am bond market.

Pemex’s annual European outing on Wednesday came as a pleasant surprise to many Lat Am bond bankers, showing Lat Am issuers still have significant pulling power. But the euro market is unlikely to pull more borrowers from the region, even as dollar funding costs rocket.

Unigel, the Brazilian petrochemicals company, completed an inaugural international bond sale on Tuesday in a deal with a highly targeted distribution after drastically sweetening terms for investors.

Peruvian agricultural company Camposol cancelled a proposed tender offer for existing bonds on Monday evening after failing to raise the debt required to finance the buyback.

Unigel, the Brazilian petrochemicals company, has set initial price thoughts on a planned inaugural international bond two months after it aborted a first attempt.

Colombia’s highest rated issuer, Empresas Públicas de Medellín (EPM), is in danger of a downgrade after troubles in the construction of its planned Ituango hydroelectric plant, the largest infrastructure project in the country.