LatAm Bonds

As investors turn their eyes in earnest to Mexico’s forthcoming presidential elections, Fitch said that the country’s economic and fiscal resilience would be tested this year.

Peruvian agricultural company Camposol has cancelled a tender offer for existing notes after market conditions led it to delay a new bond sale, but Lat Am bankers are not overly pessimistic about prospects for primary markets.

Aluar, the Argentine aluminium producer, will look into the possibility of issuing local or international debt after the company’s board of directors approved a $300m bond shelf.

Brazilian steel producer CSN (Companhia Siderúrgica Nacional) has more than halved the size of a planned tender offer after completing a smaller than intended bond issue last week amid market volatility.

Mexican state-owned oil giant Pemex will more than double the size of its 30 year bond issued on February 1 after receiving a strong response to an exchange offer.

Four Latin American issuers ventured into cross-border markets on Thursday after a deceptively calm Wednesday, only to be faced with a wave of volatility that had investors worried and led to wider pricing.

Mexican non-bank lender Unifin made its second bond market outing of the year on Thursday with a senior unsecured deal that came at the wide end of initial price thoughts.

Bankers said that the Dominican Republic’s Dominican peso bond sale was the highlight of a busy but choppy day in Latin American primary debt markets, though market volatility cost the sovereign heavily in dollars.

Bond market participants said on Wednesday said that Latin American issuers could return in force on Thursday after another day of calm in markets.

Secondary markets for Latin American bonds have held up well in the context of a storm of hefty sell-offs across global equity markets, but volatility is likely to make new issuance tougher as a raft of high yield borrowers line up deals.

Bankers observing South American development bank CAF’s return to euro markets on Tuesday suggested that the multilateral had done well to push through equity market volatility with its largest ever euro deal.

Panda bond issuance has so far been dominated by overseas-incorporated Chinese names. That bolsters volumes, but it does little to help the market fulfil its role of boosting RMB internationalisation. Policymakers have the chance to fix it — but only if they are bold enough to let markets play a bigger role.