LatAm Bonds

Some observers argued the US Federal Open Market Committee’s October press statement was more hawkish than the market had anticipated, but LatAm bankers saw no nasty surprises as Tuesday’s new issues traded above reoffer.

Peruvian cement company Unacem and Panamanian lender Global Bank brought new names to EM bond portfolios on Tuesday to remind the world that there are Latin American bond issuers beyond Chile.

Chilean copper Codelco led the way on a busy Tuesday in LatAm bond markets with a 30 year issue that came tight to its own curve and showed that investors are comfortable the US Federal Open Markets Committee will not spring any surprises regarding rates increase at its meeting on Wednesday.

Analysts covering Peruvian debt expect hefty demand for cement company Unión Andina de Cementos’ (Unacem) planned benchmark size seven year non-call four deal, saying initial price thoughts offer an attractive pick-up to a longer duration but better-rated bond from fellow Peruvian Cementos Pacasmayo.

Government owned oil company Empresa Nacional de Petróleo (Enap) made it four Chilean bond issues in four business days with a $600m 10 year on Monday.

Government-owned Chilean oil company Empresa Nacional de Petróleo (Enap) could make it four new issues in four business days for Chilean corporates on Monday after E-CL ensured LatAm bond markets ended the week on a high with its long-awaited new issue on Friday.

Mexico IT infrastructure company SixSigma Networks Mexico (Kio) will spend this week meeting bond investors ahead of a potential debut international bond issue.

Bankers are expecting scarcity value to drive strong demand as Peru and Chile consider their first international bond market outings since 2012. Both sovereigns will be encouraged by Colombia’s continued record breaking performance in bond markets during their absence, epitomised by Tuesday’s 10 and 30 year tap.

Just a week ago, some debt bankers were worried that broad volatility could shut down LatAm bond markets for the rest of the year. But on Thursday Sociedad Química y Minera de Chile (SQM) notched a new issue concession of close to zero for a refinancing exercise as Chilean corporates became the main beneficiaries of what proved to be excellent issuance conditions.

Equity markets are responding more strongly than bond markets to pessimism about Brazil’s election scheduled for Sunday, say bankers covering the country. However, that may only mean the bond markets have further to fall should incumbent Dilma Rousseff retain power, said one LatAm syndicate banker at a Brazilian bank on Thursday.

The lone Peruvian borrower in the pipeline is cement and concrete company Unión Andina de Cementos (Unacem), which will finish a roadshow on Friday and hold conference calls on Monday in advance of of a potential debut bond issue.

Corporate borrowers’ rush to raise money before earnings numbers go stale in mid-November looks to have begun in earnest in Latin America as still low base rates provide attractive conditions for issuers.