LatAm Bonds

Latin American development bank Corporación Andina de Fomento (CAF) is an old hand in emerging capital markets, having just completed its 100th bond issue. But with a new clean sweep of double-A ratings, the supranational is challenging itself to find a new investor base. CFO Hugo Sarmiento tells Olly West about its funding plans.

Central American supranational Cabei will look to various emerging market currencies to meet the rest of its $800m 2013 funding target, the development bank’s head of capital and financial markets has told EuroWeek after a successful debut dim sum deal raised Rmb500m ($80m) on Monday.

Banco de Crédito del Perú (BCP), Peru’s biggest bank by loans and deposits, sold $350m of Baa2/BBB+ rated 10 year senior unsecured bonds on Monday as Peruvian issuers continue to benefit from strong growth in the country.

New issues from Banco ABC Brasil and Brazilian state Minas Gerais concluded a busy week in Latin American bond markets as both borrowers overcame the unusual nature of their deals to tighten yields.

Pacific Rubiales (Ba2/BB+/BB+) last Friday made it nine Latin American international bonds for the week, attracting a jumbo book as investors continued to seek yield in LatAm.

Peruvian deals are also supported by a growing pension fund sector, which can invest up to 35% of its assets in dollars.

The universe of Peruvian corporates that international bond buyers can invest in is rapidly growing as companies look to take advantage of their country’s reputation as the golden growth story in Latin America.

This week saw yet more Brazilian real paper available for international investors as Ba2/BB/BB+ rated conglomerate Cosan tapped its 2018 real-denominated bonds for a further R$350m ($174m).

Central American utility AES El Salvador (Ba2/BB) sold $310m of 144A 10 year non-call five bonds to yield 7% on Thursday as part of a debt refinancing that will see the company’s $300m of outstanding 2016 notes repaid.

The Kingdom of Sweden’s successful $1bn swoop on the dollar market on Thursday, with a three year at the tightest mid-swaps print of the year, confirms the safe haven bid is alive and well in the face of uncertainty surrounding the Cyprus bail-out.