Latin America

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.

Brazilian bonds rallied on Thursday after the Supreme Court ruled that former president Lula Inácio da Silva must go to jail before exhausting his last appeal against a corruption conviction — effectively ruling him out of October’s presidential election.

Grupo Bimbo, the world’s largest bread maker, will begin meeting fixed income investors on Thursday as it plans a subordinated perpetual hybrid bond, just after Standard & Poor’s said the company was deleveraging more slowly than expected.

Argentina’s largest province is planning to issue around $496m of peso-denominated notes this week and will look to sell a portion of the bonds to international investors.