LatAm Bonds

With little sign of the Latin American borrowers that were considering issuing new debt in December, syndicate bankers covering the region are already preparing themselves for what could be a very busy start to 2015.

Banca IMI Securities, a subsidiary of Intesa SanPaolo, has hired Brian Dixon to head its US debt syndicate desk and further their efforts in the US — and Latin America — debt capital markets.

One bond investor said Venezuelan debt suffered its “worst day in memory” in spite of a very slight rebound in oil prices on Tuesday as investors increasingly expect there will come a time when the South American country will not be able to pay its debt.

LatAm bond syndicate bankers said that the immediate future was bleak for Brazilian companies’ borrowing prospects after meatpacker JBS cancelled a planned new issue and tender offer blaming debt market conditions on Monday.

Venezuela’s oil export basket hit its lowest price since 2009 last week as analyst predict that the government will be forced to make economic adjustments — in partciular with regards to the convoluted exchange rate system.

Chile sold the tightest ever 10 year bond from an emerging market issuer on Wednesday although investors swapping the euro denominated deal back into dollars could have earned between 15bp-30bp by buying the euro tranche instead of a simultaneous dollar offer, said bankers.

Latin America’s three largest oil companies are maintaining hefty investment programmes despite tumbling oil prices, thanks to their low production costs and comfortable profit margins. Yet that is about as far as the similarities go for Venezuela's PDVSA, Brazil's Petrobras and Mexico's Pemex.

Joaquim Levy’s welcomed appointment as Brazil's finance minister was not enough to lift the brakes on new debt capital market activity in the country as contagion from the Petrobras corruption investigation continues to affect the country’s issuers.

Argentine state oil and gas company YPF could tap its outstanding 10 year bonds any day now, according to a source close to the company.

Bankers close to Chile’s international bond market comeback said that the quality of the order book and long-term diversification meant it was worth the sovereign paying as much as 30bp more to sell 10 year debt in euros than it did in US dollars.

Chile entered the market on Wednesday with its debut euro trade. It is also expected to announce a long dollar 10 year at the US open, which investors say could be printed at a yield of lower than 3%.

Brazilian industrial conglomerate Cosan Indústria e Comércio will buy back at least $365m of its outstanding 8.25% perpetual deal after bondholders owning nearly three quarters of the existing notes agreed to tender their paper before the early bird deadline of December 1.