LatAm Bonds

Thursday’s trading proved wrong the idea that all Brazilian bad news was priced in, as government and Petrobras bonds sold off in reaction to a double dose of news from Moody’s on Wednesday.

Opposition supporters were rejoicing in Venezuela this week after their greatest electoral victory over Chavismo, but the bond market’s reaction was muted as oil plummeted to nearly seven year lows and the scale of the political and economic challenges that lie ahead loomed large.

Private equity giant CVC Capital Partners will open its first Latin America office in early 2016 and has picked Jean-Marc Eltin, CEO of Brazilian bank Itaú’s investment banking business, to head its operations in the region.

UniCredit has made a string of internal appointments to its Asia and Americas management teams.

Bolivia’s budget for 2016 includes a $1bn bond issue to finance the construction of hospitals, finance minister Luis Arce said at a press conference in the capital, La Paz.

Spreads on Chile’s sovereigns bonds tightened by 1bp across the curve on Tuesday as Latin America’s best rated country began a fixed income investor roadshow.

Brazil took a step closer to sub-investment grade status on Wednesday when Moody’s placed its Baa3 rating on review for downgrade.

For Venezuelan bonds to jump as much as four points on a day that oil prices reached seven year lows on Monday was surely a sign that something special had happened. But some analysts felt that such will be the impact of Sunday’s parliamentary election in Venezuela that the bonds should have rallied even further.

Energy company Medanito will hit the road this week to meet fixed income investors ahead of a maximum $150m deal as Argentine borrowers continue to show interest in international markets despite the small size of most companies in the country.

Argentina’s issuers are wasting no time returning to international capital markets after Mauricio Macri’s victory in the November 22 presidential elections, though Lat Am bond bankers warned that tough times remained ahead for the country.

Bond bankers say that Mexican government-owned oil company Pemex will have to overcome fears that European investors have over emerging market and oil related names as it looks at issuing its second sterling bond.

Mexican real estate investment trust Fibra Uno was forced to issue less than it was hoping for this week, in a deal that exemplified the new reality to which Latin American issuers — even the well-liked, solid credits — must become accustomed.