LatAm Bonds

Emerging markets bond bankers can think of nothing to derail the ongoing bull-run and while this might point to hubris, this week’s trades have given no indication of fatigue.

The Province of Buenos Aires will look to sell around Ap7.5bn ($481m) of peso-denominated five year bonds in the coming days but has surprised some market participants by opting for a domestic law bond with a floating interest rate.

Bond investors in Latin America appear happier to be stretched by tight pricing than hairy credit quality after Brazilian state oil giant Petrobras pulled off an exceptionally tight bond return on Monday.

The provinces of Buenos Aires and Mendoza are planning to join the list of Argentine issuers opting to sell peso-linked debt after recent deals by YPF and Banco Macro.

A blow-out deal from Argentine energy company Capex reassured Latin American bond bankers that the market had shrugged off a handful of deals that did not run as smoothly as hoped.

Mexico City-based DCM bankers say that the mood among the country’s financial community has drastically improved since the start of the year, as Unifin on Wednesday became just the fourth Mexican credit to issue dollar debt in 2017.

Brazilian electricity company Cemig will return to bond markets towards the end of the month. It had failed to garner sufficient investor interest before its earnings numbers went stale.

Latin American bankers see a calmer period ahead for corporate new issues and some companies are already plotting deals for later in the quarter.

Argentine energy company Capex and Mexican financial Unifin showed that conditions were as strong as ever in Latin American bond market as both high yield names notches blow-out new issues.

Mexican financing and leasing company Unifin Financiera raised $450m of seven year bonds on Wednesday as bankers’ hailed the company’s improving reputation in the market.

The emerging market bond pipeline remained strong this week with Turkish lender Finansbank the latest CEEMEA name to join the fray, after the borrower announced a one day roadshow for Wednesday. Meanwhile, Latin American borrowers are beginning to encounter some investor push-back.

Recent developments in Latin American new issue markets may have shown just how risk-tolerant the market has become, but there are signs that investors may be fighting back.