LatAm Bonds

Caribbean island Grenada is set to default on its international debt, leaving investors cautious on debut international bonds from smaller, low-rated sovereigns.

Rating agency Moody’s said on Wednesday that Mexico’s proposed reforms of the telecoms and broadcasting industries would be negative for corporates credits — notably América Móvil (A2/A-/A) and Televisa (Baa1/BBB+/BBB+) — despite the reforms being generally positively received as a much-needed opportunity to increase competition in the market.

Latin American supranational CAF (Corporación Andina de Fomento) is likely to issue a US dollar benchmark in the second quarter as recent upgrades lead it to target SSA investors over traditional emerging market bond buyers.

Latin America bond bankers said late on Monday that they still expected Honduras to price its debut international bond on Tuesday, despite one of the leads, Barclays, withdrawing from the transaction “due to recent developments relating to a required additional disclosure to the offering materials”.

Banco Santander Brasil sold R750m ($385m) of three-year senior secured notes to international investors on Monday afternoon, in the third global local currency bond to come out of Latin America in three weeks.

Central American sovereign Honduras is set to price its debut international bond on Monday, according to a person working on the deal, having completed a four day roadshow last week.

The death of Venezuelan president Hugo Chávez on Tuesday reversed the rally in the country’s bonds that had built in anticipation of his departure, as investors fretted over the uncertainty of the political transition.

Banco Santander Chile became the latest emerging market issuer to access the Swiss franc market on Thursday, selling a four year floating rate note. Emerging market issuers are becoming increasingly prominent in the Swiss franc market because of the high yields on offer for investors.

Cosan, the Brazilian conglomerate, sold $750m-equivalent of bonds on Thursday, nearly double its original target, after taking advantage of strong demand from Brazilian investors to add a global tranche in reais.