LatAm Bonds

Latin America's DCM bankers remained positive even as no issuers seemed brave enough to come to market in a week in which EM bonds continued to suffer.

The EM primary bond market is still recoiling from the latest Federal Reserve quantitative easing tapering action, weakened emerging market currencies and the resulting sell-off in secondary bond market trading levels.

LatAm DCM bankers said that Itaú’s record profit in the fourth quarter of 2013 showed that Brazil’s lenders remained very creditworthy institutions, despite concerns about economic growth and fiscal management in the country.

Brazilian petrochemical company Braskem will use all the funds from its recently issued new $500m 10 year bond to buy back existing notes maturing in 2017, 2018 and 2020, the company said.

Peruvian miner Minsur battled through a tough day in the markets to print a 10 year bond, pricing in line with guidance but increasing the size of the issue by $50m.

Guatemalan mobile company Comcel sold $800m of 10 year non-call five bonds on Thursday, defeating the expectations of some EM syndicate bankers who believed that the market was not ready for LatAm high yield borrowers.

The Central American Bank for Economic Integration (Cabei) defied a sell-off of emerging market debt on Tuesday to price a curve extending Swiss franc note. The trade’s success, despite other Latin American credits suffering a widening in spreads since January 24, offers a positive sign for further EM issuance in the currency.

Oil products company Puma Energy priced its debut high yield bond in line with guidance on Tuesday, relying on broad appeal to a varied investor base to overcome the sell-off in emerging market credits.

Guatemalan mobile company Comcel sold $800m of seven year non-call four bonds on Thursday, defying the expectations of some LatAm syndicate bankers who believed that the market was not ready for new high yield borrowers.

The decision by the US Federal Open Market Committee (FOMC) to slow its bond buying programme by a further $10bn per month had little effect on LatAm bond markets, said traders, as EM-specific concerns override US Treasury bond movements.

The Central American Bank for Economic Integration (Cabei) defied a sell-off of emerging market debt on Tuesday to price a curve extending Swiss franc note. The issuer’s strong reputation among Swiss investors allowed it to hit its maximum size target at a modest new issue premium, despite other Latin American credits suffering widening spreads since January 24.

A calmer day in LatAm bonds on Monday after Thursday and Friday’s rout in emerging markets was not enough to entice any borrowers to issue as attentions turned to Wednesday’s US Federal Open Market Committee meeting.