LatAm Bonds

Panic seems to have set in in 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.

Opsimex, the telecoms tower spin-off of Mexican giant América Móvil, could issue in dollars as soon as Thursday if market conditions are good enough after completing a Ps15bn ($920m) local market bond sale on Wednesday.

Brazil and Standard & Poor’s rating actions have a peculiar relationship. In March 2014, S&P downgraded the sovereign to BBB- but the bond market subsequently rallied as the rating agency offered a stable — rather than negative — outlook.

Colombian oil company Pacific Rubiales had some of the worst of an ugly Monday for Latin American high yield credit as lower oil prices and a downgrade at the end of last week push its bond prices 3.5-4 points lower on the day.

Fitch removed the positive outlook from privately owned Brazilian bank BTG Pactual’s ratings on Monday, saying the deterioration in the operating environment in Brazil outweighed the positive effects of the acquisition of Swiss private bank BSI.

Brazilian credits had yet another tough day on Friday to complete a torrid week for the country in bond markets. The rough ride has put at least one issuer off of coming to market.

Few Latin American debt bankers gave the impression they could predict levels of new issuance in the coming weeks with much certainty with predictions for August ranging from “totally dead” to “much busier than usual” on Thursday afternoon.

Jamaica’s $2bn bond sale on Thursday showed that bond markets were “constructive as well as cautious” said LatAm debt bankers, though the sovereign was seen paying up for its dual tranche deal.

A torrid week in secondary markets for Brazilian credits meant that no bankers were surprised that industrial conglomerate Cosan opted not to issue on Thursday having completed investor meetings on Wednesday ahead of a planned 144A/Reg S deal.

Barbados-headquartered insurance company and financial services group Sagicor Financial Corporation will meet fixed income investors next week ahead of a potential senior unsecured bond issue that it plans to use to buy back existing debt.

Caribbean island nation Jamaica filed a bond shelf with the SEC for issuance of up to $3bn on Tuesday, taking it one step closer to a much anticipated deal that would be at least partly used to finance PetroCaribe loans owed to Venezuela.

Industrial conglomerate Cosan looks set to provide the toughest test of investor appetite for Brazilian credit risk since Petrobras published its delayed 2014 financials results in April.