LatAm Bonds
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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.
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Brazilian Banco Pine has issued guidance of 8.875% area for a seven year lower tier two transaction, in so doing becoming the latest Brazilian bank to tap the international market.
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The Latin American new issue market stayed hot this week after a blow-out deal from a Brazilian corporate borrower on Friday. Supported by investors’ increasing appetite for emerging markets debt, a wide spectrum of senior and subordinated issues for the region’s corporate and financial borrowers is being marketed.
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Expected heavy further dollar supply from sovereign, supranational and agency issuers failed to materialise this week in the face of a rallying Treasury market and nervousness sparked by plans to limit the size and scope of financial institutions mooted by Paul Volcker, the head of President Obama’s Economic Recovery Advisory Board.
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Greek finance officials hit back this week after the country priced a much larger-than-expected bond at a slimmer-than-expected spread, with an outsize order book — only to see the bonds dive in secondary trading and its future market access again in the spotlight.
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The Brazilian primary debt market remained healthy with three more corporate and bank borrowers looking to sell new bond issues as EuroWeek went to press,
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KfW made a stunning call on the dollar market this week, picking optimal timing for a new 10 year benchmark as investors ventured down the curve to enhance yield.
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Latin American borrowers rushed to issue at cheap rates this week in an attempt to get in before market conditions soften.