LatAm Bonds
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The Republic of Argentina has pushed back the early bird deadline for holders of $18bn of defaulted debt to take up an exchange offer.
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The Inter-American Development Bank took advantage of a strong central bank bid for dollar issuance by a non-European entity this week, issuing a $1bn three year global bond at an impressive mid-swaps less 2bp pricing.
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European Central Bank purchases of government bonds — as much as Eu25bn, said some sovereign DCM specialists — and liquidity support for the region’s banks settled nerves and yields in equal measure this week. But questions over the long term operation of the Eu750bn offered by the European Union and International Monetary Fund stabilisation package went unanswered, potentially opening the door for renewed bouts of volatility.
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Three Latin American companies are pursuing new issues this week after borrowers from the region raised nearly $3bn last week. Pricing levels available to LatAm names have held up better lately than those for European and North American counterparts, according to bankers.
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Global markets reacted in fear and fury this week after the European Central Bank turned a deaf ear to calls for it to intervene in the debt crisis that has spilled over from Greece and shut down bond markets, sent equities sharply lower and pushed the euro into a tailspin.
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The Republic of Argentina began talks with investors this week over exchanging $18.3bn of debt on which it defaulted in 2001. The offer closes on June 7, with an early bird deadline of May 12 for holders of more than $1m of the bonds. Principal of $17.6bn, plus $700m interest accrued by the end of 2001, is eligible for the exchange.
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The US bond market avoided the worst aspects of the turmoil in the eurozone following the downgrades to Greece, Portugal and Spain this week but the financial sector was hit by concerns closer to home — the Goldman Sachs Senate hearing sent bank spreads wider as traders weighed the likelihood of tougher regulation.
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