LatAm Bonds
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Though some details remain up in the air the European Commission’s new CRD IV proposals have brought banks significantly closer to issuing tier one hybrids that absorb losses through equity conversion, according to regulatory capital structurers.
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The European Financial Stability Facility (EFSF) will be recalibrated as the saviour of European government debt markets if the sweeping new measures contained in the draft proposal from Thursday’s summit of eurozone heads of council are ratified by the 17 euro area member states.
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Clarity from the Financial Stability Board on which banks will be classified as globally systemically important, and how they can be wound down in a crisis, is imminent.
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Latin American high grade names did not escape the effects of the market turmoil this week. Caribbean Development Bank (CDB) succeeded in pricing a small dollar floater on Wednesday but at the cost of concessions on both size and duration.
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Arcos Dorados proved the strength of investor demand for its paper when it printed a five year real denominated deal last Friday in the teeth of a tanking US market.
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A pair of postponements failed to dampen spirits in Latin American markets this week, as an Argentinian sub-sovereign proved the market was still open and the pipeline continued to build.
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The US dollar market for high grade sovereign, supranational and agency borrowers was primed for business this week, as witnessed by the more than $6.6bn of orders for the three year global bond launched by the European Investment Bank. The sheer scale of demand allowed the supranational to issue $5bn for only the second time in the history of its dollar benchmark programme.
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The Latin American bond market came back to life this week with a flurry of deals from across the credit spectrum, including benchmarks from recently upgraded sovereigns Colombia and Brazil.
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Successful euro trades by FMS Wertmanagement and OBB-Infrastruktur on Wednesday proved that the market remains open to the highest quality SSA issuers despite the turmoil that ensued following the four-notch downgrade of Portugal on Tuesday night.