LatAm Bonds

Santander’s Mexican subsidiary issued the first Basel III-compliant Tier two bond from Latin America on Wednesday, printing $1.3bn of 10 year non-call five cumulative, non-convertible subordinated notes at a spread of 460bp over the five-year US Treasury.

Venezuela was downgraded for the second time in two working days on Monday evening but the sell-off in the sovereign’s bonds was short-lived as extraordinary yields on short-dated government paper continue to attract investors.

Large books attracted by Caribbean sovereigns Honduras and Trinidad & Tobago are signs that the end of year chase for yield is on, said bankers in a busy week for LatAm bonds, as borrowers look to issue ahead of a likely volatile 2014.

Electricity generator AES Gener attracted more than $3.5bn of demand for a $450m hybrid bond, the first from a corporate in Chile, allowing leads to tighten pricing 62.5bp from initial price thoughts.

Corporación Andina de Fomento (CAF) will issue more private placements in euros in the new year, the borrower revealed to Euroweek. The levels being posted by the supranational should tempt plenty of investors, according to MTN dealers.

Dealogic league tables of bond transactions, December 11, 2013. Includes SSAs, FIG, investment grade and high-yield corporates, emerging markets and ABS.

Year to Date Latin America DCM Bookrunner Ranking

Electricity generator AES Gener attracted more than $3.5bn of demand for a $450m hybrid bond, the first from a corporate in Chile, allowing leads to tighten pricing 62.5bp from initial price thoughts.

Mexican petrochemicals company Grupo Idesa sold $300m of seven year non-call four notes on Wednesday in its inaugural international bond outing. The book was not spectacular, reaching just over $400m, but the company priced the deal in line with guidance and bankers close to the deal said they were happy with the geographical spread of demand for a debut deal.

Chilean utility company AES Gener has tightened price guidance for its $450m 60 year non-call 5.5 year step up note to 8.5% area, with area defined at plus or minus 12.5bp. Pricing of the deal is expected to take place after the New York open.

Annual emerging markets bond market issuance hit an all time high at the end of last week, with notes from both CEEMEA and Latin America contributing to push the volumes over last year’s $468bn. While there is no sign of LatAm letting up, the CEEMEA region appears to have shut down for the year.

Colombian finance minister Mauricio Cárdenas highlighted the need for greater infrastructure investment as crucial for the country to continue its upward ratings trajectory after Fitch upgraded the sovereign by one notch to BBB on Tuesday.