Latin America

Fitch removed the positive outlook from privately owned Brazilian bank BTG Pactual’s ratings on Monday, saying the deterioration in the operating environment in Brazil outweighed the positive effects of the acquisition of Swiss private bank BSI.

Credit default swaps referencing Brazil have hit their widest levels of the year, with the continuing crash in commodities weighing heavily on those names most exposed and adding to a raft of other woes for the country.

Brazilian credits had yet another tough day on Friday to complete a torrid week for the country in bond markets. The rough ride has put at least one issuer off of coming to market.

A torrid week in secondary markets for Brazilian credits meant that no bankers were surprised that industrial conglomerate Cosan opted not to issue on Thursday having completed investor meetings on Wednesday ahead of a planned 144A/Reg S deal.

Caribbean island nation Jamaica filed a bond shelf with the SEC for issuance of up to $3bn on Tuesday, taking it one step closer to a much anticipated deal that would be at least partly used to finance PetroCaribe loans owed to Venezuela.

Industrial conglomerate Cosan looks set to provide the toughest test of investor appetite for Brazilian credit risk since Petrobras published its delayed 2014 financials results in April.

While some of the shine has come off its reform programme, Mexico occupies a key position in the emerging market universe, with its highly respected central bank, finance ministry team and policy agenda lauded by the international investor community. Philip Moore reports on the country’s progress since President Peňa Nieto came to power in 2012 and the long term impact of the far-reaching and ambitious reform programme.

In local and international bond markets the Mexican government has led the way in recent years, demonstrating the importance of a proactive and innovative debt management strategy. This has allowed the country to calmly navigate periods of volatility in emerging markets. With such volatility likely to persist until after the Federal Reserve finally raises interest rates, GlobalCapital sat down with the country’s debt chief and leading bankers and local investors in Mexico City to find out what Mexico does and needs to do to achieve such stability.

Finance Minister Luis Videgaray’s decision to cut annual infrastructure spending by $1.15bn in his January 2015 budget was unfortunate considering how much needs to be spent on the country’s inadequate roads, railways, ports and power facilities. Philip Moore reports on whether the private sector can help fill the infrastructure finance gap.

Mexico’s private pension funds (Afores) have played a key role in supporting the growth of the domestic capital market since the late 1990s. Now it’s time for them to diversify, writes Philip Moore.

Mexico could hardly enjoy a better reputation among emerging market investors right now, with companies in the country revelling in their new role as darlings of the capital markets. GlobalCapital met leading borrowers and banks in Mexico City to discuss how far-reaching the effects of the energy reforms will be, and the prospects for peso-denominated funding amid the government’s attempts to entice international buyers into the domestic corporate debt market.

Mexico is seen as a bright spot in the emerging markets, and investors are hungry for assets. But while disintermediation has provided plenty of fodder in corporate funding markets, the banking sector has yielded far less issuance. Could an increase in lending tip the scales? Will Caiger-Smith reports.