LatAm Bonds
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Grupo Bimbo’s presence in the packaged bread market is so strong in parts of Latin America that when you want sandwich bread at a supermarket or café you ask for “pan Bimbo”. Based on Tuesday’s evidence, investors agree that Bimbo bonds are the best thing since someone thought to cut their loaves before selling them. -
Construction group OAS and poultry company Globoaves are set to bring more Brazilian high yield supply after announcing initial price thoughts for dollar-denominated deals on Tuesday.
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InRetail Shopping Malls, owner of Real Plaza shopping centres in Peru, began investor meetings in Latin America on Tuesday as it looks to sell a 144A/Reg S bond to refinance existing debt.
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Chilean power generation company Colbún will begin investor meetings on Friday ahead of a possible 144A/Reg S bond, 10 months after it postponed previous bond issuance plans blaming market conditions.
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Grupo Bimbo, the Mexico-based global bakery firm, may announce a new $1bn bond issue as soon as Tuesday after completing a roadshow on Friday. LatAm syndicate bankers expect a 10 year tranche and possible 30 year trade.
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Ecuador proved investors are willing to forgive, forget and reinvest on Tuesday. The sovereign sold a $2bn 10 year deal — double some bond buyers’ expectations — in its first international transaction since a $3.2bn default in 2008. The final yield was wider than some analysts’ predictions, but was still tight enough to cause consternation that demand is getting out of hand.
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Brazilian construction company OAS has picked banks for a dollar bond and will start investor meetings on Monday.
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Ecuador proved investors are willing to forgive, forget and reinvest this week. The sovereign sold a $2bn 10 year deal on Tuesday — double some bond buyers’ expectations — in its first international transaction since a $3.2bn default in 2008. The final yield was wider than some analysts’ predictions, but was still tight enough to cause consternation among fund managers worried that yields are being pushed too far.
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The Fifa World Cup is a time for hope — blind faith in fact — a time to put rationality aside and believe that this time things will be different. That lack of cool headedness should never carry over into the bond markets, but no one has told investors in host nation Brazil's and the wider Latin American bond markets.
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Brazil lit up the Latin American bond market this week with a slew of deals in advance of the World Cup kickoff. But the barrage was part of a trend far bigger than just Brazil. A wall of liquidity is being put to work, dragging LatAm bond spreads back to May 2013 levels and allowing everyone from high yield corporates to serially-defaulting sovereigns to come to market. However, as Steve Gilmore reports, some debt bankers are worried that with an end to US tapering and a Federal Reserve rate hike on the horizon, the cyclical LatAm rally is doomed to end in tears.
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Ecuador has picked banks for a roadshow ahead of it first deal in almost a decade and finishes a roadshow on Friday. Healthy economic growth and a chunky coupon are unlikely to be enough for investors to overlook a history of serial default, but such is the thirst for yield that the sovereign should easily find sufficient demand.
