LatAm Bonds

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The Federative Republic of Brazil broke its 2013 international bond market duck this week, taking advantage of strong market conditions to tap its 2023s for a further $750m.

Owners of the bonds of Mexican homebuilders are facing substantial losses as a series of downgrades culminated in two borrowers defaulting this week.

Investors are secure enough with the interest rates forecast that they are happy to buy long bonds even from corporates and crossover-rated credits, said Latin American bond market participants after three borrowers attracted bumper books for 30 year sales.

Costa Rica’s Instituto Costarricense de Electricidad (ICE) followed in the footsteps of its sovereign on Wednesday, selling a nine times oversubscribed 30 year bond as investors remain keen on the extra yield on offer from longer maturities.

Mexican homebuilder Urbi Desarrollos Urbanos (Urbi) has suffered a second wave of downgrades after missing a payment on its domestic debt. Urbi failed to make a Ps3.9m ($324,000) interest payment on its 2014 local bonds on April, and could not find the funds before the end of the grace period on May 6.

Government-owned Chilean bank Banco del Estado de Chile reopened its 2017 senior notes on Tuesday, printing $200m to bring the bond’s total size to $700m.

Media giant Televisa, one of the monopolies targeted by Mexico’s competition reforms, raised Ps6.5bn ($540m) of 30 year money on Tuesday in a deal similar to América Móvil’s global-local bonds.

Avianca Holdings, the holding company of the oldest airline in the Americas, priced a debut international bond on Friday after sweetening terms for investors. But some bondholders said it had still been a good time for the borrower to come to market.

Global local currency issuance from Latin America continued its steady pace of recent weeks as Santander Brasil tapped its 2016 Brazilian real notes for a further R$500m ($249m) in a rapidly executed trade on Thursday afternoon.