LatAm Bonds

European supranationals and agencies issued $10.5bn into the dollar market this week but found the process more challenging than expected. The big oversubscriptions that greeted issues during the first days and weeks of 2009 did not materialise and the book building process was described by bankers and issuers alike as sluggish.

Niche currency investors showed that they were not quite finished for 2009 this week, with a flurry of issuance bringing to a close a year in which total returns in emerging currencies have been impressive.

Peruvians cheered this week as a ratings change pushed their country fully into investment grade terrain, while Mexico dismissed its downgrade, saying the country’s financial situation was a greater influence on investor sentiment.

Brazil hit the market for a successful "drive-by" tap of its January 2019 bonds this week, showing that investors are still buying credits at a time of year which is often closed to new issuance.

The shock downgrade of Greek government debt by Standard & Poor’s this week to BBB+ from A-, after placing the country on CreditWatch negative only last week, has intensified pressure on the sovereign’s bond spreads and the viability of its 2010 funding programme.