LatAm Bonds

Spanish lender BBVA’s Peruvian arm attracted a six times subscribed book for a $500m 2018 bond on Wednesday as it continues to bring its curve tighter to that of the country’s largest bank, Banco de Crédito del Perú (BCP).

Colombia’s Congress on Wednesday authorised a $10bn increase in the amount of external debt the country can issue, although the sovereign is only planning to use $1.6bn of this extra capacity in 2013. The legislation lifts Colombia’s external debt ceiling to $44bn.

Investors may be hungry for yield but, as the International Finance Corp proved this week with its oversubscribed $2bn five year global, there is more than enough room for top quality assets from the sovereign, supranational and agency community.

A near 40% year-on-year drop in bond issuance from Latin American borrowers is little cause for panic and instead merely reflects a changing make-up in the kind of issuers tapping the market, LatAm bankers have told EuroWeek.

A bevy of sovereigns, supranationals and agencies are slated to issue next week to take advantage of the data and holiday-free session and the continuing imbalance of supply and demand. And while the hunt for yield is still rife and peripheral markets have steadied after the Cyprus debacle, as the International Finance Corp proved this week (see separate story), demand for safe haven assets remains plentiful.

Colombia’s Congress on Wednesday authorised a $10bn increase in the amount of external debt the country can issue, although the sovereign is only planning to use $1.6bn of this extra capacity in 2013. The legislation lifts Colombia’s debt ceiling to $44bn.

BBVA Banco Continental was able to tighten pricing on a new 2018 bond in yet another success story for a Peruvian borrower, after attracting a book of $2.947bn for a $500m deal.

BBVA’s Peruvian arm could return to the bond markets as soon as Wednesday after mandating BBVA, Goldman Sachs and Bank of America Merrill Lynch to lead a senior unsecured dollar-denominated deal, the bank said.

Latin American debt markets were unable to match last year’s frantic start as the volume of international bonds issued by LatAm issuers in the first quarter of 2013 dropped by nearly 40% compared to the same time in 2012, according to data from Dealogic.

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