Latin America

Long dated issuance returned to EM primary bond markets in force this week as DCM bankers said issuers were seeing the latest fall in US Treasury yields as a sign that they should accelerate funding plans. Although several investors remain cautious on the prospects for rates markets, the weight of cash to be put to work is set to keep funding conditions attractive for EM borrowers, writes Mariam Meskin and Oliver West.

Chile began chipping away on Wednesday at the bumper funding needs it announced last week, raising €1.75bn ($2.1bn) in social bonds in the euro market as investors said the government, which still has the lowest debt to GDP ratio in Latin America, has space to print more.

Mining firm Compañía de Minas Buenaventura sent a strong message about Peruvian companies’ access to capital markets on Tuesday, pricing its debut bond issue through guidance the day after Pedro Castillo — a leftist teacher who has pledged to hike taxes on miners and redraft the country’s constitution — was confirmed as Peru’s next president.

SMI Group, which makes plastic packaging in nine Latin American countries, began investor calls on Tuesday ahead of a proposed sustainability-linked bond.

Mexican state-owned utility Comisión Federal de Electricidad (CFE) sold $850m of 12 year bonds on Tuesday on its second visit to international markets this year.

Chilean electricity transmission company Interchile sold its first international bond on Monday, braving difficult market conditions to raise $1.2bn of green bonds.

A group of bondholders has hired lawyers in an effort to block a proposed consent solicitation from Argentine utility Edenor that seeks to free the issuer of its obligation to repurchase its bonds after a change of control provision in the indenture was triggered.

Peru published its sustainable bond framework on Friday, after the finance ministry issued a resolution approving the document and therefore paving the way for the incoming government to issue what would be the country’s first sovereign ESG bond.

Mexican real estate investment trust (Reit) Fibra Soma debuted in international bond markets on Thursday with a $600m deal. Investors said it offered an attractive spread over its larger, more established competitor Fibra Uno.

Continued strong inflows into emerging markets debt funds are encouraging riskier Latin American companies to turn to debt markets for funding — even as political risks weigh heavily on the outlook for certain credits. While some buyers think they are picking up rare bargains, others are concerned that they’re becoming overexposed to the region.

Chile’s head of international finance told GlobalCapital this week that the country was likely to tap euro and dollar bond markets again this year after it increased its 2021 funding needs by $8bn.

Frigorífico Concepción, the Paraguay beef exporter, sold its largest and tightest ever bond on Wednesday as it looked to continue its rapid expansion.