LatAm Bonds

Mexican duo Pemex and América Móvil headed to Europe to raise financing this week, becoming the first corporates of the year to join the trend of Latin American borrowers selling euro denominated debt.

Cemex tightened its latest deal by over 50bp from initial price thoughts as the Mexican cement company was rewarded for a conservative starting strategy with a well-oversubscribed book.

Latin American debt bankers could not hide their delight on Wednesday evening after a remarkable day in new issue activity that included two heavily oversubscribed deals from high yield issuers that traded up in the grey.

State-owned oil giant Pemex became the second Mexican company to raise euro denominated debt this week, following the same strategy it took in dollars earlier in the year by focussing on the short end of the curve.

Emerging market investors have plenty of opportunity to pick up corporate debt this week with Mexican oil and gas giant Petroleos Mexicanos (Pemex) returning to euros and Koc Holding in dollars.

The Province of Buenos Aires is likely to provide an early test of appetite for Argentine credit on Wednesday after completing a roadshow with Citi, HSBC and JP Morgan.

Mexican telecoms giant América Móvil become the first private sector firm from Latin America to issue international bonds on Monday, raising €1.5bn of euro-denominated paper with a tighter new issue premium than most of the region’s sovereigns have managed recently.

América Móvil, the Mexican telecommunications firm, took advantage of a rally in emerging market debt to open books on its debut euro-denominated bond with a tight concession on Monday.

The arrest of former Brazilian president Lula da Silva gave new urgency to a strong rally in Brazilian bonds on Friday after the market appeared to take the detention as a sign that president Dilma Rousseff was closer to impeachment.

There may be some signs of life in Latin America’s new issue market but, while sovereigns may be selling, companies are keener to buy back bonds than issue new ones.

Latin America’s pain is Argentina’s gain. A torrid year for bond markets and economic struggles across the region have set the stage perfectly for Argentina — so long the sick man of Latin America — to return to international bond markets with an audacious trade.

Latin American bond bankers can finally look forward to some roadshow action as credit markets were quite stable for a third consecutive week but euros continues to be the favoured currency for borrowers.