Latin America

Banco de la Ciudad de Buenos Aires (Banco Ciudad) is lining up a potential international bond outing after mandating banks for an Argentine peso-linked trade.

Two high profile Latin American issuers brought the region’s corporate sector back into play on Thursday. Mexico’s Grupo Bimbo and Brazilian lender Banco do Brasil both managed hefty spread tightening after offering conservative price talk, much like the EM sovereigns that dominated primary markets.

Argentine gas pipeline operator Transportadora de Gas del Sur (TGS) became the latest Latin American corporate to join the new issue pipeline on Thursday, as bankers predict market conditions will become friendlier.

The first investment grade sovereign trades from Latin American in more than two months left the sell-side feeling more optimistic about the pipeline as issuers were finally able to enjoy relative stability in broader markets.

Cometa Energía, a group of Mexican energy assets to be acquired by emerging markets private equity firm Actis, is understood to be preparing a bond issue of $907m that will be used to finance the buy-out.

Moody’s said that it believed fiscal reforms in Brazil were inevitable no matter who wins October’s election, removing the country’s negative outlook just weeks after the rating agency’s peers downgraded the sovereign.

EM syndicate bankers have said that primary market activity in Latin America is set to pick up this week after Panamá printed the first investment grade sovereign deal from the region since January.

After international investors placed nearly $450m-equivalent of orders for the Province of Buenos Aires’ peso-denominated floater last week, bankers and investors said that issuers in the country may favour local currency over dollars in coming weeks.

The Province of Buenos Aires was ready to price a Euroclear local law peso floater on Thursday evening as investors showed appetite for Argentina’s positive real interest rates despite volatility in broader markets.

Grupo Bimbo, the world’s largest bread maker, began meeting fixed income investors on Thursday ahead of a proposed perpetual hybrid bond as Latin American issuers continue to look to bring unconventional structures to market.

Three of Brazil’s most important issuers received overwhelming responses to tender offers in the last week, as the country’s corporates focus on liability management.

Rio Oil Finance Trust, the SPV through which Rio de Janeiro’s state pension fund RioPrevidencia issues bonds backed by royalties from state oil giant Petrobras, has a knack for timing.