LatAm Bonds

With local currency devaluations hurting dollar bond issuers across Latin America, Peruvian sugar cane producer Corporación Azucarera del Perú (Coazucar) has launched a tender offer for up to $165m of international bonds.

Sellside bankers desperate to generate business in a stormy LatAm debt market will have been pleased. For as a lesson for issuers in the benefits of sacrificing a few basis points in the interests of getting a deal done, Colombia’s long 10 year on Monday was as good as they come.

Volatile global markets and Brazil-focussed pessimism made for a torrid week in Latin American credit as most of the region’s bulging pipeline of new issues opted to stay on the sidelines amid the secondary sell-off.

Another torrid week for Brazilian credit had investors predicting the sell-off in the country’s assets had further to run despite some names looking cheap at first glance.

Brazilian low-cost airline Gol Linhas Aereas Inteligentes is considering becoming the second Latin American company to issue EETCs (enhanced equipment trust certificates), a type of secured bond that has become fashionable among airline borrowers.

A torrid day in global markets stopped the Latin American issuers in their stride on Tuesday, with all bonds suffering in secondary markets and Wednesday unlikely to see any more deals given the Jewish holiday of Yom Kippur.

Latin America bankers observing Colombia’s latest bond issue had no complaints about execution but said that the deal was evidence of the higher concessions that the region’s issuers must pay amid EM and commodity-related volatility.

Brazilian telco giant Oi’s bonds dropped up to 14 points before recovering much of the lost ground as the company hired Rothschild to advise it on its debt profile but denied a restructuring was on the cards.

Mexican development bank Banco Nacional de Comercio Exterior (Bancomext) will meet bond investors between Wednesday and Friday as Latin America’s new issue pipeline, deserted for so much of this year, continues to grow.

Mexico-headquartered home appliance company Controladora Mabe received a positive outlook from Standard & Poor’s on Friday afternoon, leaving the issuer close to investment-grade status just as it meets bond investors.

Latin America’s bond issuers were raring to print once the US Federal Reserve had announced its rates decision on Thursday, whichever way the verdict went. But the choice to pause rate hikes means primary markets are green-lit to burst into life.

Troubled Brazilian shopping centre owner General Shopping Brasil has launched a heavily discounted tender of its 10% senior perpetual notes in an effort to reduce its dollar debt, although Fitch says that a debt restructuring is “likely to occur in the near future”.