LatAm Bonds

Latin America’s only new bond issue so far this week traded up on Tuesday despite a general market sell-off, offering encouragement about the state of the market to the three high yield issuers from the region out with price thoughts for debut international bonds.

Latin America’s largest airline attracted a book of $2.7bn for a $450m bond backed by existing and future US and Canadian dollar-denominated ticket receivables, allowing the company to price the trade in line with analysts' expectations.

HSBC on Monday became the latest bank to announce that it is being investigated in regards to alleged manipulation of the foreign exchange market. But it also reported improved profits at the group level, despite weaker results in its global markets business.

Latin America bond markets this week showed that the huge demand recently generated by well-known or high-rated credits is also available further down the credit spectrum and for debut borrowers.

Corporación Andina de Fomento (CAF) returned to the Kangaroo market this week, selling its second ever syndication. Investors were attracted by the high coupon on the paper, leading bankers to speculate that other emerging market issuers may consider looking at Australian dollars.

Dealogic league tables of bond transactions, October 30, 2013. Includes SSAs, FIG, investment grade and high-yield corporates, emerging markets and ABS.

Dealogic league tables of bond transactions, October 30, 2013. Includes SSAs, FIG, investment grade and high-yield corporates, emerging markets and ABS.

Dealogic league tables of loans transactions, October 31, 2013.

Peruvian debut issuer San Miguel Industrias attracted $2.3bn of demand for a first international bond of just $200m as the borrower-friendly conditions in the Latin American bond market showed no signs of letting up.

Corporación Andina de Fomento (CAF) sold its second ever Kangaroo bond on Wednesday, drawing investors with a high yield on offer and suggesting healthy demand for other emerging market names in Australian dollars.

The Latin American bond market emphatically passed its latest test as high yield Guatemalan cement company Cementos Progreso attracted $2.2bn of orders for its inaugural international deal of $350m on Tuesday.

Ba2/BB rated Peruvian corporate San Miguel Industrias is likely to be the next LatAm borrower to print bonds, having released initial price thoughts of 9% for a debut seven year non call four trade expected to total $200m.