Latin America

Argentina's economy ministry has appointed two dealer-managers and a financial advisor to manage the restructuring of the country’s $67bn of foreign law sovereign bonds.

China’s importance in global pulp and zinc markets puts pulp producers Suzano and Arauco — alongside Peruvian miner Volcán — among the Latin American corporates most vulnerable to the coronavirus (Covid-19) outbreak, according to Fitch Ratings.

Continued IMF support and a government attempting to exercise market-friendly policy mean that Ecuador’s bonds should begin to attract buyers after the sovereign was the worst hit in last week’s rout in Latin American credit, say some bond market participants.

Debt capital markets bankers expect the Argentine government to mandate dealer-managers on its mega distressed debt exchange by early next week, as they plan for a complex transaction in which size could make up for low fees.

Latin American bond bankers are putting on brave faces as the Covid-19 epidemic threatens to thwart what several sell-side houses say is an exceptionally busy March pipeline.

As volatility finally hit Latin American primary markets, the only action from the region’s issuers this week came through liability management, with Peruvian miner Nexa and Brazilian airline Gol both prepaying bonds.

Mexican polyethylene producer Braskem Idesa’s 2029s were the worst performing bonds in emerging markets on Wednesday after the country's president Andrés Manuel López Obrador said he was analysing whether he could break a contract under which Pemex supplies the company with ethane.

Nexa Resources Perú, the mining company previously known as Compañía Minera Milpo, will buy back more than half of a dollar bond maturing in 2023 as it’s set to wrap a tender offer.

Global market volatility triggered by fears surrounding Covid-19 outbreak, finally hit Latin America bonds on Monday just as bankers said they are preparing another heavy wave of issuance.

Brazilian airline Gol said on Friday that it would be redeeming in March a bond it had tried — and mostly failed — to repurchase a year ago.

The IMF’s call for a “definitive debt operation yielding a meaningful contribution from private creditors” in Argentina only triggered a slight fall in sovereign bond prices as investors said there was little new in the statement. But fears are rising that the country is facing a lengthy restructuring process.

Brazilian pulp and paper company Suzano is working on structuring a bond that would reflect its commitment to sustainability. But its chief financial officer told GlobalCapital that the green bond market was unable to maximise the impact capital markets could have on sustainability.