Latin America

Latin American euro denominated issuance looks here to stay, no matter the arguments made against it by US bankers, after Colombia sold its first bond in the single currency since 2001 on Wednesday.

Another blow to credibility in Brazil sent the sovereign’s bonds tumbling on Tuesday after former president, Luiz Inacio Lula da Silva looked set to accept a ministerial position in Brazil’s government just a week after prosecutors requested his arrest as part of a corruption investigation.

Beverage company Femsa became the third Mexican company in a week to sell euro denominated bonds on Monday, jumping on an ECB-driven rally in credit markets to sell €1bn of seven year paper.

Costa Rica based lender Banco Bac San José is looking to syndicate a slice of a $75m borrowing in Asia, sending out an outline of the loan to prospective participants in the region on Monday.

Brazil’s emphatic return to international bond markets on Thursday was likely designed to encourage its non-sovereign issuers to the market, said Lat Am bond bankers, although some questioned whether these deals would materialise.

Votorantim Cimentos, the cement making arm of Brazilian conglomerate Votorantim SA, will buy back just €120m of its euro denominated bonds after most bondholders rejected the terms of a proposed tender offer. The company was hoping to buy back €350m.

Mexican duo Pemex and América Móvil headed to Europe to raise financing this week, becoming the first corporates of the year to join the trend of Latin American borrowers selling euro denominated debt.

Cemex tightened its latest deal by over 50bp from initial price thoughts as the Mexican cement company was rewarded for a conservative starting strategy with a well-oversubscribed book.

Latin American debt bankers could not hide their delight on Wednesday evening after a remarkable day in new issue activity that included two heavily oversubscribed deals from high yield issuers that traded up in the grey.

State-owned oil giant Pemex became the second Mexican company to raise euro denominated debt this week, following the same strategy it took in dollars earlier in the year by focussing on the short end of the curve.

Emerging market investors have plenty of opportunity to pick up corporate debt this week with Mexican oil and gas giant Petroleos Mexicanos (Pemex) returning to euros and Koc Holding in dollars.

The Province of Buenos Aires is likely to provide an early test of appetite for Argentine credit on Wednesday after completing a roadshow with Citi, HSBC and JP Morgan.