LatAm Bonds

Iochpe Maxion, the Brazilian group that makes more vehicle wheels than any other company in the world via its Maxion Wheels division, said on Friday that it is considering turning to cross-border bond markets for financing.

A lack of close comps and fragile high yield market conditions appeared to have helped investors to earn very attractive yields on a pair of high yield deals from the Caribbean that were priced in the last week.

Syndicate bankers covering Latin America were finally admitting that new issuance could be mostly over for the summer after secondary bond markets, led by Brazilian credits, sold off again this week.

Caribbean financial services firm Sagicor’s new 2022s traded up three points in a tough market on Wednesday as the sensation grew that the hard-to-compare credit had priced at a very attractive level for investors on Tuesday.

Caribbean insurance company Sagicor raised $320m through a seven year non-call four bond on Tuesday as the bid from US high yield investors continues to help lower rated companies in LatAm issue.

Barbados-based insurer Sagicor Financial Corp kept eyes on screens in the Latin America market this week. The firm priced its second ever international deal, while the CEEMEA market is using summer for consent solicitations.

Barbados-headquartered insurance company and financial services group Sagicor Financial Corporation is likely to price a $320m seven year non-call four bond on Tuesday, according to a syndicate banker working on the deal.

Caribbean cable company Sable International, a subsidiary of Cable & Wireless, broke the LatAm new issue deadlock on Friday with a $750m seven year bond that came tight to price talk but wide of where investors had heard price indications earlier in the process.

Bond market participants were left pondering whether the sell-off in Brazilian assets had been exaggerated after a negative outlook from Standard & Poor’s triggered a rally and stabilisation in credit spreads in the country.

Latin American bond bankers say that despite a volatile couple of weeks in the region’s bond markets, there is no reason for investment grade companies to delay issuing if they have funding needs.

With emerging market currencies taking a battering across the globe, local currency bond issues continue to be a tough ask. However, innovations in the Mexican market are providing an encouraging grounding for future deals.

Panic seems to have set into Latin American bond markets. Bids are disappearing, according to several traders and bankers, and volumes are well down on last year. But though market participants may need to readjust expectations, they should not be too disheartened.