LatAm Bonds

PDVSA’s $5bn bond issuance announced on Wednesday has triggered worries that the company will take itself into even more debt than expected this year as the Venezuelan government looks to bring dollars into the economy.

Bond investors are expecting Mexican construction company Empresas ICA to receive a strong response for a planned new bond after the company posted improved first quarter results.

Talk of Venezuela’s government taking a fancy to economic pragmatism may be overdone according to some, but state oil company PDVSA’s decision to issue new bonds shows that the authorities have at least learnt some basic financial lessons.

Bond investors are expecting Mexican construction company Empresas ICA to receive a strong response for a planned new bond after the company posted improved first quarter results.

Peruvian drinks Ajecorp’s dollar bonds tumbled further into the 80s during Tuesday’s trading as recent poor results continue to put off buyers who say they are struggling to find relative value in a well-bid Peruvian corporate bond market — even when credits sell off.

LatAm bond investors say prospects are looking up for the struggling Brazilian sugar and ethanol sector as the astonishing performance of Tonon Bioenergia’s latest bond issue promises improved market access for its peers. GVO may soon become the next company in the country and sector to issue to refinance debt, say investors.

Brazilian steel company Gerdau will exchange more than $1bn of old bonds for new 10 year debt as liability management exercises from the country’s corporates continue in earnest.

Nearly 80% of investors holding Brazilian pulp producer Fibria Celulose’s 2021 bonds have agreed to sell the notes back to the company as the company continues its attempts to become fully investment grade.

Concerns over Brazilian economic growth are apparently not strong enough to prevent issuers from the country making the most of bond investors’ desperate search for yield. First Caixa Econômica Federal and then Fibria Celulose issued tightly-priced, well oversubscribed deals at a larger than originally indicated size this week.

Mexican broadcaster Televisa took the LatAm bond market deep into negative new issue premium territory on Thursday as confidence regarding rates and immunity from political turmoil in eastern Europe provided LatAm borrowers with issuance conditions well beyond the expectations of many bankers.

Liability management transactions from BRF Brasil Foods and Fibria Celulose have brought the number of Brazilian companies to issue new bonds to finance tender offers for existing paper up to six in 2014 as borrowers rush to take advantage of low rates.

Demand for Latin American bonds continues to surprise the very people selling the debt as Brazilian pulp producer Fibria Celulose became the latest issuer to pounce for a tightly-priced new issue to fund a liability management.