Latin America

Investors in Latin America are growing increasingly concerned that social unrest in Colombia, where tax reform plans are in tatters and more than 40 people have been killed, is a sign of things to come, with sovereigns facing severe pressure as they attempt to improve credit profiles that have been battered by the coronavirus pandemic. Yet sovereign bond markets are seeing only modest, short-lived sell-offs, given the enormous liquidity still in bond markets.

The Province of Buenos Aires extended the participation of its restructuring offer for the 16th time this week, but bondholders denied the province's claim that they had requested the extension.

Mexican food company Grupo Bimbo proceeded with a 30 year bond issue on Wednesday despite a US inflation reading that sent Treasury yields to their widest levels in a month. A strong bid from US investment grade buyers ensured a bumper order book, but some observers were surprised that the issuer had not delayed its deal in the face of a tricky market.

Inversiones Atlántida (Invatlan), the Central American financial services group that owns the largest bank in Honduras, is looking to raise $300m of senior secured bonds, it told fixed income investors this week.

Uruguay began investor calls on Monday ahead of a proposed dollar and global local currency bond issue. The marketing effort came as the government continues to take steps towards issuing what would be the first sustainability-linked bond from any sovereign — though this week’s expected deal will not have ESG characteristics.

AI Candelaria, the holding company through which private investors own a stake in Colombian oil pipeline Ocensa, returned to bond markets on Monday with a larger than expected $600m deal as Ocensa’s resilience during the coronavirus pandemic outweighed concerns about social unrest and a potential credit rating downgrade in Colombia.

The government of Suriname issued a stinging riposte to its bondholders on Friday, accusing the creditor committee of issuing a “misleading and factually incorrect statement” about the sovereign’s debt restructuring.

Four Latin America and Caribbean companies sold new issues in the dollar market at very tight looking levels on Thursday, as investors continue to feel pressure to put to cash to work amid extremely high liquidity.

Brazilian airline Gol on Thursday sold the first public bond deal from a Latin American airline since the coronavirus pandemic began, increasing the size of a tap of its 8% 2026s as hopes grow that the vaccine rollout will accelerate in the region and enable the worst affected industries to recover.

Chile raised $2bn in dollar markets on its fourth international bond market outing of the year on Tuesday, achieving slim new issue concessions even as volatility in domestic markets is leading the sovereign to lean more heavily on external funding sources.

A committee of Belize’s largest bondholders said on Wednesday that there was a “lack of transparency” in the country’s debt restructuring proposal, claiming that Belize failed to address several creditor concerns during confidential negotiations. The committee said bondholders should not bear the costs if Belize decides to reject an IMF programme.

AI Candelaria, the holding company through which private investors own a stake in Colombian oil pipeline Ocensa, is looking to issue senior secured bonds in the coming days as bankers say a sell-off in Colombian bonds remains relatively small despite major social unrest.