Latin America

Mexican state-owned oil giant Pemex emphatically showed it has access to capital markets on Thursday as it received more than $35bn of orders on the way to a $7.5bn trade that could grow as existing bondholders participate in an exchange.

The same capital controls that have brought some calm to Argentine bond markets could lead to the exclusion of certain government notes from some JP Morgan indices, said the US bank on Tuesday.

Brazilian oil giant Petrobras will continue to push out its debt maturities and reduce its outstanding stock of bonds with an exchange and tender offer that includes retiring existing notes using cash.

BBVA Bancomer and Industrias Peñoles sold a combined $1.8bn of bonds on Thursday to follow up Grupo Bimbo’s blow-out trade earlier in the week as investors found a sweet spot in high quality Mexican corporate debt.

Alpek, the petrochemicals business of Mexican conglomerate Grupo Alfa, could become the next company from the country to make the most of attractive market conditions as it looks to the bond market to refinance short-term bank debt maturities.

Argentina’s dollar bonds bounced as much as five points this week as investors were finally tempted to nibble at the distressed levels on offer. But analysts warned that the capital controls imposed by authorities would provide only short-term relief.

Alpek, the petrochemicals business of Mexican conglomerate Grupo Alfa, will look to the bond market to refinance short-term bank debt maturities.

Latin American DCM bankers welcomed Tuesday’s blow-out bond issue from Mexico baking company Grupo Bimbo, saying that they believed it would trigger other borrowers to accelerate funding plans.

Clarity on the costs that Brazilian mining giant Vale will face as a result of a tragic accident at one of its dams in January has led Moody’s to remove the negative outlook from the company’s Ba1 rating.

Moody’s said on Friday that it was placing “little weight” on the suggestion that a debt restructuring in Argentina would be voluntary. Sunday’s announcement of currency controls from the central bank showed how bad the situation had become.

Bond market participants said that Argentina’s decision to postpone the payments of some short-term Treasury bills and “re-profile” the rest of its debt was unlikely to provide a sustainable solution to the country’s financial woes.

Adrian Neuhauser, the new chief financial officer of Avianca, said on Thursday that he thought a “very high percentage” of bondholders would participate in a bond exchange that could unlock up to $250m of financing from United Airlines and shareholder Kingsland Holdings.