LatAm Bonds

Guatemalan lender Banco Agromercantil added to a growing number of LatAm issuers meeting bond investors, announcing a roadshow with Bank of America Merrill Lynch and Citi on Monday.

Peruvian real estate company Portales and Brazilian meatpacker Minerva announced roadshows at the end of last week as LatAm continues to enjoy strong borrowing conditions despite a more hawkish US Federal Reserve.

Latin America’s most frequent sovereign bond issuer, Mexico, will begin meeting fixed income investors in Europe on March 26, according to a banker close to the borrower. The borrower told GlobalCapital in January that it was intending to issue in euros at some point in 2014.

The prospect of rising interest rates did not stop Mexican conglomerate Grupo Alfa raising 30 year money as part of its debut dollar bond on Thursday as a more hawkish than expected US Federal Reserve did little to hinder new issues from Latin America.

Banco do Brasil brought its debut euro transaction up to €1bn with a well-timed €300m tap this week as the issuer took advantage of a rally in Brazilian paper as accounts dumped Russian risk. And a chunky new issue concession ensured a strong secondary performance, even as comments about quantitative easing and interest rates from the US Federal Reserve put pressure on markets.

Bond investors paid little attention to Moody’s decision to downgrade Argentina as the sovereign’s debt was flat to tight after the rating agency’s announcement. And Bank of America Merrill Lynch actually raised its recommendation on Argentine debt to overweight on the same day as the downgrade.

Brazilian state-owned lender Banco do Brasil tapped its euro denominated bonds due 2018 for a further €300m on Wednesday after raising around €750m of demand before bond markets dropped on the back of the US Federal Reserve’s latest statement.

Caribbean telecoms company Digicel sold $1bn of eight year non-call three bonds on Wednesday in a deal run off the leads’ US high yield desks as it looks to buy back up to $775m of existing debt.

Mexican conglomerate Grupo Alfa, owner of two well known LatAm bond issuers Tenedora Nemak and Alpek, could sell its first dollar bond by the end of the week despite officially being on a non-deal roadshow.

A rapid decline in Argentina’s dollar reserves pushed the sovereign into C territory with Moody’s on Monday but the downgrade is at odds with investor sentiment in the country, according to some analysts.

Political turmoil in Ukraine and the next US Federal Reserve meetings on Tuesday and Wednesday has muffled the Latin American new issue market so far this week, with last week’s deals trading flat to slightly up in secondary.

Brazilian companies that would like to issue are likely to do so before the football World Cup begins on June 12, said DCM bankers focussed on the country after meatpacker Marfrig sold the first high yield bond of the year from the country late on Thursday.