Latin America

Banco Mercantil do Brasil extended the settlement date for a buyback of its 2020 dollar denominated subordinated debt this week, because it has not yet received central bank approval to increase the amount it can purchase.

Larger companies needing growth capital have a useful source in Mexico’s stockmarket, where demand in roughly equal quantities from domestic and foreign investors has supported a strong rise in issuance. It is going through a dip this year – but as Jon Hay reports, if Mexico delivers on reforming energy markets, there will be plenty of deals to come.

In this round-up, Hong Kong deposits rose in April, but cross-border RMB trade settlement fell, Macau announced its March deposit figures, ICBC opened two new offshore branches in Montreal and Riyadh, RMB clearing in South Korea has reached a daily average of Rmb25bn, and Japanese bank MUFG helped Brazilian clients settle trade with China in RMB.

With hopes high among debt bankers that Brazil could become a core source of green bond issues, BR Foods (BRF) sold the first environmentally friend bond from the country last Friday.

Brazilian food group BRF sold its debut euro denominated note around 25bp wide of its dollar curve on Friday with a green bond issue that DCM bankers said was an impressive result for an inaugural deal in the currency.

Chile has taken the prized spot of being the first Latin American renminbi hub, with a clearing bank, a central bank swap line and an RMB qualified foreign institutional investors (RQFII) quota all being announced on May 25.

Lehman’s worst mistake was to get its timing wrong — six months ago it might have been saved by Hank Paulson. But Bear Stearns and the US mortgage agencies used up the Treasury’s willpower and that left Lehman horribly exposed and alone.

• $3.9bn Q3 loss racked up after Alt-A hedging failure • $30bn plan to spin-off REI comes too late • Fannie and Freddie bailout euphoria wiped out Lehman Brothers was front, back and centre of events in the credit market this week and at the close in New York yesterday rumours gathered strength that Bank of America is poised to rescue the ailing investment bank.