Latin America

Bond and currency markets rallied on Monday after Mexico’s new president Andrés Manuel López Obrador (Amlo) presented a budget that Fitch said marked a continuation of Mexico’s existing fiscal framework.

Bond market participants mostly welcomed news that Ecuador had signed a loan with China last week, with some stating that the government’s fiscal adjustment left the sovereign’s bonds looking attractive despite a negative outlook from Moody’s.

NiQuan Energy Trinidad Ltd, the owner of a gas-to-liquids plant in Trinidad and Tobago, held its final conference calls on Thursday and appears to represent the Lat Am DCM market’s last hope of primary activity in 2018, with most bankers now looking towards January.

Mexico City Airport Trust (Mexcat) offered an improved deal to bondholders this week as it seeks to make the documentation changes necessary to allow it to cancel its Texcoco airport project, but analysts said the new government has a long way to go before regaining the trust of markets.

Bondholders were never going to be satisfied with Mexico’s new government after it cancelled the airport project in which they’d invested $6bn. But though the issuer’s tender offer and consent solicitation is unlikely to be the administration’s last squabble with markets, it is still a good sign.

Mexico’s finance ministry showed it was willing to listen to investor concerns with a new improved tender offer from Mexico City Airport Trust (Mexcat), but for some bondholders at least it will not be enough to persuade them to participate.

Paraguay wasp once again the rare consistent provider of good news for Latin America bond markets this week when it earned a credit rating upgrade from Fitch that puts it just one notch off investment grade status with three of the major rating agencies.

A group of bondholders publicly opposing the proposal by Mexico City Airport Trust (Mexcat) to amend documentation in its bond documents now represents over half the issuer’s debt, according to the law firm representing them.

Mexico City airport bondholders are right to turn their noses up at attempts to modify documentation. But though the issuer’s offer will not be the new government’s last squabble with markets, it is still a good sign.

Peruvian cement company Cementos Pacasmayo will buy back more than half its dollar bonds after an oversubscribed tender offer.

In this round-up, Trump was confident China would deliver on promises from G20 dinner, China signed several cooperation agreements in Panama and Argentina, China Financial Futures Exchange (CFFEX) planned to lift bans on trading stock-index futures to boost market activity.

NiQuan Energy Trinidad Limited, the owner of a gas-to-liquids plant in Trinidad & Tobago, began meeting bond investors on Tuesday. But another tough week left Latin America bond bankers down on the chances of new issuance before the end of the year.