LatAm Bonds

Votorantim Cimentos, the cement making arm of Brazilian conglomerate Votorantim SA, will buy back just €120m of its euro denominated bonds after most bondholders rejected the terms of a proposed tender offer. The company was hoping to buy back €350m.

Latin America high yield bonds demonstrated their similarities with London buses on Wednesday as the Province of Buenos Aires and a Mexican cement company issued the first high yield bonds from Latin America since January 28 in the same week.

So remarkable has been the turnaround in sentiment in Latin American credit markets that bankers and investors could scarcely believe it was real, with as many borrowers issuing in four days this week as have done all year.

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.