LatAm Bonds

Government-owned Peruvian mortgage lender Fondo Mivivienda has said it will issue Pen3.5bn ($1.17bn) of new debt as part of its “sustainable financing strategy” for 2015 and 2016.

President Nicolás Maduro’s much-anticipated end of year speech did not give investors in Venezuela the reforms they wanted to hear although the country's bond yields tightened slightly from all-time highs as oil prices stabilised at the end of 2014.

Ecuador, which has never made a principal payment on an international bond, has received an upgrade from Moody’s even as analysts warn that lower oil prices represent a threat to the country’s economy and credit rating.

Greater deal volume in Brazil and Colombia pushed Citi back to the top of Latin America’s international DCM bookrunner league tables as last year’s champion Deutsche Bank fell to fifth position.

LatAm DCM and syndicate bankers were breathing sighs of relief on Thursday after the secondary market bounced following a torrential start to the week as bond markets reflected oil price volatility.

DCM bankers hope that this week’s first ever green bond issue from Latin America will be the first of many, with the potential for growth in renewable energy a source of possible new deals.

Chilean bus operator Alsacia has left Chapter 11 bankruptcy four months after beginning a restructuring of its senior secured notes. Bondholders of the company’s outstanding notes escaped with no principal haircut.

A series of pessimistic outlook reports for Latin American borrowers from Fitch this week will have done little to lift the mood as a record year in LatAm bond markets comes to an end on a gloomy note.

ContourGlobal’s decision to refinance debt at its Peruvian subsidiary Energía Eólica with a green bond gave it a slight pricing advantage than if it had treated the deal as a normal EM issue, according to bankers working on the deal.

Energía Eólica is expected to bring some life to Latin America’s cross-border bond markets by pricing the region’s first ever green bond this week.

LatAm bankers in New York say now is the time to take extra holiday as falling oil prices, Brazil contagion from the Petrobras scandal and weak high yield markets mean there is no incentive for borrowers to come to market.

With CDS levels indicating an almost 90% chance of default in Venezuela, a tumbling oil price and renewed hostile rhetoric from president Nicolás Maduro has bondholders weighing up potential restructuring scenarios — even if there are reasons to believe the bond sell-off may have gone too far.