Latin America

Ricardo Martínez, Ecuador’s finance minister, insisted a bond the sovereign issued on Monday was necessary, despite credit analysts saying the country cannot sustain issuing at high rates.

Pacific Gas & Electric has gone bankrupt with $52bn of debt, blaming forest fires that seared California during 2018. Vale, with $11bn, has been downgraded to the bottom edge of investment grade after its horrific dam burst last Friday.

Following confusion over the effect US sanctions against Venezuelan state oil company PDVSA could have on US bondholders, the final picture is growing clearer and the unfurling scene is not a pretty one.

Despite some investors saying it had been clear for some time that Pemex was on a gradual decline towards junk status, a two notch rating downgrade from Fitch appeared to catch bondholders unaware as the Mexican state oil giant’s debt slumped in secondary markets.

A fresh round of US sanctions on Venezuela’s government can only squeeze President Maduro further, said bond investors, but meanwhile there was some confusion on Tuesday regarding the apparent ban on secondary market trading of PDVSA debt by US persons.

A fresh round of US sanctions on Venezuela’s government will add to the pressure on 46th president of Venezuela Nicolas Maduro to clear off, said bond investors.

Brazilian pulp and paper producer Suzano returned to bond markets for the third time in five months on Tuesday, tapping its 2029s for a further $750m.

The US sanctions slapped on Petroleos de Venezuela (PDVSA) this week look similar to those that have just been removed from Russia’s EN+ and Rusal. The move indicates that the US believes in the effectiveness of sanctions and is happy to keep deploying them. Emerging markets investors should beware.

Liquidity-constrained South American sovereign Ecuador was quick to take its chance to raise much-needed funds on Monday after a strong rally in its bonds, but the deal had investors and analysts worrying an IMF deal is further away than thought.

The largest and best rated airline in Latin America has mandated six banks to lead a bond sale as it prepares to issue $500m-$700m of senior unsecured bonds.

Corporación Nacional del Cobre de Chile, the largest copper producer in the world, became the first Latin American quasi-sovereign to tap bond markets this year as it returned to the long end of the curve.

Brazilian building materials company Votorantim Cimentos has increased the size of a tender offer and given bondholders more time to participate, it said on Friday.