Latin America

At least five Argentine provinces are considering tapping international bond markets this year, according to investors, with the Province of Buenos Aires likely to be first after announcing a roadshow on Wednesday.

Should Argentina issue its $15bn in one go or not? If president Mauricio Macri’s government — and its debt officials — continue to communicate and then back those words with action, it won’t matter how many deals it takes.

Brazilian cement company Votorantim Cimentos is looking to buy back up to €350m ($380m) of debt, using the proceeds of a cash injection from its holding company to become the latest issuer to take advantage of the poor performance of Brazilian bonds.

Fomento Económico Mexicano (Femsa) has mandated three banks for its debut euro denominated bond, which it will roadshow next week around the European Central Bank policy meeting.

Bankers and analysts were confident that Argentina will find the demand it needs for a triumphant return to international capital markets after the mediator in its debt dispute said that the 15 year legal battle between the country and leading holdout creditors is nearing a solution.

Argentina’s nearing return to international bond markets after more than 15 years away could drive the Province of Buenos Aires to get its bond funding out the way as soon as possible to avoid clashing with the up to $15bn of sovereign supply in the pipeline.

Standard & Poor’s downgraded Costa Rica from BB to BB- on Friday, keeping the sovereign’s rating on negative outlook as the Central American country’s public finances come under pressure.

Hypermarcas, the Brazilian pharmaceutical company, will not extend the early bird deadline on the tender offer for its 6.5% senior notes due 2021 after bondholders responded positively to the buy-back offer.

Lat Am bond bankers said the seven banks understood to have led Argentina’s repo trade in December were the strongest candidates to lead the sovereign’s seemingly imminent re-entry into international capital markets.

Not all emerging markets bond bankers may agree with the strategy — with certain deal-hungry New York dealers particularly vociferous in their opposition — but Latin American sovereigns are placing increasing faith in the euro market for their international funding, writes Oliver West.

Brazilian bonds rallied on Wednesday afternoon after the country's treasury secretary told local press that the sovereign was considering buying back foreign bonds in what DCM bankers said was likely to have been a deliberate response to a ratings cut from Moody’s in the morning.

Latin America sovereigns’ new found fancy for euro denominated bonds has sparked fierce words from syndicate bankers defending and questioning the trend.