LatAm Bonds

A returning bid for Latin American high yield and low-beta names on Thursday offered some respite to the region’s struggling bond market as new cross-border debt issuance continues to slow.

The Argentine government’s claims of dedication to paying its creditors are falling on deaf ears with international investors as the sovereign’s bonds tumbled in the wake of its attempt to make a coupon payment to exchange bondholders due September 30.

DCM and syndicate bankers still expect 2014 to be a record year for cross-border bond issuance from Latin America and the Caribbean, despite volumes not maintaining the same breakneck pace during the third quarter.

Bank of America Merrill Lynch and Citi were the biggest climbers in the Latin America and Caribbean international bookrunner DCM league tables in last three months, with Citi replacing HSBC at the top and BofA Merrill breaking into the top four.

For Argentina it is a sign of its dedication to paying creditors. For the US judge involved it is contempt of court. One thing is for sure: the South American state’s payment of its international bonds via a local account shows that a conclusion to Argentina’s debt saga is no nearer than it was when the sovereign defaulted on July 31.

The pharmacy and supermarket arm of Peruvian conglomerate Intercorp Peru is planning a new seven year non-call four bond of up to $350m in order to fund the buyback of its $300m 8.875% notes due 2018.

US investment grade bond investors drove demand for Mexican retailer Puerto de Liverpool’s debut international bond issue on Thursday, said bankers close to the deal. This helped the borrower to raise $300m on what one DCM banker called the worst day of trading of the year so far.

Mexican debut issuer Puerto de Liverpool attracted solid demand for 10 year bonds on a torrid Thursday for bond markets. Being able to tighten by 10bp from initial price thoughts enabled the company to clinch funding at just 15bp wide of where investors saw fair value, though on another day the credit may have been able to price even tighter, they said.

Banco do Brasil is asking holders of its old-style hybrid tier ones to swap into new notes eligible as additional tier one capital under Basel III regulations.

Colombian oil company Pacific Rubiales’ bondholders said they were wondering whether terms on a proposed debt exchange were worth their while after the issuer’s newest bond performed poorly in the secondary market.

Investors expect retailer Puerto de Liverpool to continue Mexican issuers’ good run in the bond markets after the company indicated initial price thoughts of 150bp-175bp over US Treasuries for a debut 10 year bond.

Brazilian cement company Cimento Tupi is aiming to price an expected add-on of $50m to its existing 2018 notes this week subject to market conditions, according to a banker working on the deal. B/B rated Tupi will wrap up a roadshow in Switzerland on Thursday.