LatAm Bonds
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For a brief period this week, the market reversed its opinions on the fate of Greece. But despite a sharp improvement in spreads, bankers question whether the country will be able to raise the money it desperately needs in the near term.
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New issuance from Latin America paused this week, as issuers stopped for a breather after a busy start to the year, and markets took stock of volatile conditions. The previously busy region has been devoid of new issuance since February 5, when Brazil’s Banco Votorantim priced a senior unsecured deal.
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Brazil’s Banco Votorantim returned to the international market for the second time in as many months on Friday, selling $500m of senior unsecured bonds the same week that volatile market conditions forced another Brazilian bank to postpone its transaction.
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Two days of relative stability in European peripheral sovereign markets lulled Spain’s Instituto de Crédito Oficial (ICO) and its three lead managers into believing a new five year benchmark could be successfully executed this week. Their confidence was premature.
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Corporate lender Banco Pine became the latest Brazilian bank borrower to issue lower tier two debt this week, in a $125m seven year deal priced to yield 9% and well supported by European and Latin American investors.
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Coca-Cola FEMSA, a Mexican company which produces and distributes the global soft drink company’s products in Latin America, took the regional record for lowest yielding issue ever when it sold a 10 year bond at 105bp over US Treasuries on Tuesday.
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The dollar market looks a haven for supranational and agency issuers compared with the beleaguered euro sector, although bankers warn that international investors are increasingly concerned about European agencies after the week’s fallout in European peripheral sovereigns.