LatAm Bonds

Venezuelan state oil company PDVSA’s plans to raise Chinese yuan-denominated bonds show that the beleaguered nation is unable to raise financing from its traditional markets, said investors.

Mexican hotel group Grupo Posadas brought the lowest rated deal to Latin American bond markets since April, and despite it not being a blow-out bankers said any high yield supply was positive.

While Colombian state oil giant Ecopetrol made the most uncontroversial return to bond markets possible this week, Pacific Rubiales — the largest independent oil group in the South American country — saw its bonds take another plunge in a highly volatile year.

Colombian state oil company Ecopetrol on Tuesday notched up a deal that bankers saw as going as well as could be expected given a less than vibrant market and that it was the borrower’s first issue since oil prices began to fall.

Peruvian government owned development bank Corporación Financiera de Desarrollo (Cofide) will begin meeting fixed income investors ahead of a possible return to bond markets.

Colombian state oil company Ecopetrol on Tuesday made its much anticipated return to bond markets for the first time since oil prices began to plunge, and priced a solid deal amid headwinds.

Bond bankers covering Latin America fear summer has come early for new issuance from the region as lack of use of proceeds has decreased the need for new financing.

Bonds of Brazilian construction giant Odebrecht Engenharia e Construcão plummeted on Friday after the arrest of the company’s head and other executives.

LatAm bond market participants said high yield new issue volumes would remain depressed in the region unless Mexico takes up the slack from Brazil’s shaken sub-investment grade sector.

Paraguay looks set to build on its upward ratings trajectory after Standard & Poor’s placed its BB rating on positive outlook thanks to the country's greater resilience to the weak economies in the region.

Tonon Bioenergia avoided default at the last possible moment by making a $12m interest payment on its senior secured bonds on the very last day of its grace period. However, holders of the company’s senior unsecured notes will likely take a hit as the company has proposed to swap the bonds for notes paying lower interest.

Fitch followed up last week’s default from Cimento Tupi with a report warning that refinancing risk is “elevated” for Latin American corporates rated single-B or below that have bonds of under $400m outstanding.