Latin America

Bonds issued by the Province of Buenos Aires enjoyed a rally this week as some investors sensed a restructuring agreement is closer, even as a group of bondholders finally lost patience and sued Argentina’s largest province in New York’s courts.

The creditor committee of Suriname bondholders says that it requires both further economic data and confirmation that it will have a say on the country’s economic programme before its members can participate in a consent solicitation launched last week.

A group of investors owning a portion of Belize’s only international bond are forming a bondholder committee and are hosting an investor call on Friday as the highly indebted Central American sovereign prepares yet another debt restructuring.

Investors holding over a quarter of the Province of Buenos Aires’ international bonds said they would “vigorously pursue” the legal proceedings that they began on Tuesday against Argentina’s largest province, which has been in default since April 2020. But bonds rallied as some saw the move as a sign that a resolution was nearing.

Peru’s largest lender, Banco de Crédito del Perú, offered a slim new issue concession on Tuesday as it sold $500m of tier two bonds, with bankers saying that liquidity dynamics remained favourable for Latin American issuers.

Operadora de Servicios Mega, the Mexican leasing company, began investor calls on Tuesday as it looks to raise up to $150m via a re-opening of its only international bond.

Banco de Crédito del Perú (BCP), Peru’s largest lender, scheduled investor calls beginning Monday morning ahead of a proposed 10.5 year non-call 5.5 tier two bond that will be used to refinance existing bonds.

LatAm bankers and investors say a strong issuance window for non-Brazilian credits has opened, as political and fiscal concerns take their toll in Latin America’s largest economy.

Bond markets have been settling in for a period of higher US Treasury yields since Wednesday when the Federal Reserve confirmed it did not expect to raise rates before 2024. While that made long-dated issuance trickier for SSA issuers, there was hope that emerging market bond issuance will soon resume, even if a bumpy ride lies in wait. Mariam Meskin, Oliver West and Lewis McLellan report.

Suriname asked bondholders for more time to reach a crucial agreement with the IMF on Wednesday evening, requesting investors extend a previously agreed holiday on all bond payments.

Moody’s became the third rating agency in four months to downgrade Panama’s sovereign rating, cutting the borrower from Baa1 to Baa2 on Wednesday afternoon on the back of an “unusually large” erosion of the country’s fiscal strength during the coronavirus pandemic.

Bond bankers say new issuance from Latin America is unlikely to pick up until after Easter, even though they believe the technical dynamics in the market remain favourable for issuers.