LatAm Bonds

Peruvian plastic packaging company San Miguel Industrias is looking to issue new debt to refinance its only existing international bonds, which mature in 2020.

Bonds issued by Venezuela and its state-owned oil company PDVSA recovered ground after US president Donald Trump issued an executive order prohibiting the trading of new debt issued by the entities.

Brazilian mining giant Vale looks set to continue to reduce its debt by redeeming its 5.625% 2019s and via a tender offer of its 4.625% 2020s.

Venezuela’s bond market access is already negligible. If market participants want to take a moral position, they need to think about more than just new issues.

Venezuela and PDVSA bonds regained some ground on Thursday as reports that the US would implement a blanket ban on trading the securities appeared to be exaggerated. But the bonds remain near all-time lows as the market weighs up the possibility of US sanctions against the crisis-ridden nation.

There were no new bond issues from Latin America this week, but one EM syndicate banker claimed to be “brutally busy” pitching for September as market participants said Brazilian and Argentine issuers are likely to dominate new issue activity.

Some EM bond investors said that they were interpreting the drop in Venezuelan bond prices on Wednesday as a buying opportunity, saying that it was unlikely that the US would block all trading in the securities.

Chilean copper miner Codelco completed the second leg of its tender offer on Tuesday, bringing the total amount of debt that it has repurchased using proceeds from last month’s new issue to $2.357bn.

Investors were unperturbed by the first outflows from EM funds since 2016 last week, adding that some sources still recorded inflows, but noted that after good returns this year, they were happy to take less risk for the rest of the year.

Credit Suisse’s decision to ban trading in certain Venezuelan bonds is understandable, but ultimately raises more questions than it answers.

Juan Carlos Echeverry has left his position as CEO of Colombian state-owned oil giant Ecopetrol.

Scotiabank’s head of Latin American debt capital markets has left both the Canadian bank and the banking industry after more than 20 years working in EM bond markets.