Latin America

Brazilian mining giant Vale said on Friday that it plans to prepay its €750m January 2023s as record iron ore prices allowed it to build cash levels greater than its gross debt.

El Salvador’s bonds retained recent gains on Thursday as EM’s riskiest credits proved resilient to the week’s US Treasury sell-off, with bondholders hoping that Sunday’s mid-term elections will give president Nayib Bukele the political capital he requires to implement an IMF programme.

Emerging market assets took a hit after several days of US rates volatility this week as market participants braced for further gyrations and issuers avoided raising dollar bonds. Market participants are praying that further central bank stimulus will pacify markets and believe that the asset class is far better prepared for higher rates than it was for the 2013 taper tantrum. Oliver West, Lewis McLellan and Mariam Meskin report.

Spreads on Petrobras’s bonds recovered most of their lost ground this week after a sharp sell-off followed Brazilian president Jair Bolsonaro sacking the company’s chief executive on Monday. But while strong quarterly results released on Wednesday were a reminder of the state-owned oil and gas giant’s fundamental strength, Bolsonaro’s actions have led to questions around policy decisions in an economy with major fiscal issues.

Mexican broadcaster TV Azteca, which missed a coupon payment on its international bond earlier this month amid plans for a 'debt reorganisation', surprised analysts by posting strong fourth quarter results this week.

América Móvil, the Mexican telecommunications company controlled by Carlos Slim, had to cheapen the terms of its €2.2bn bond exchangeable into shares in Dutch telco KPN, but still achieved a remarkably cheap refinancing of a non-core stake.

Peru is set to test Latin America bond market resilience to both US rates volatility and domestic election uncertainty soon as it meets fixed income investors virtually this week ahead of a proposed euro and dollar new issue.

Petrochemicals producer Alpek, which is owned by major Mexican conglomerate Grupo Alfa, will buy back almost half of its $650m of 4.5% 2022s after wrapping a tender offer on Tuesday.

Petrobras bonds slumped on Monday after Brazil's president Jair Bolsonaro nominated retired general and former defence minister Joaquim Silva de Luna to be the state-owned oil and gas giant’s new CEO. One analyst decried “corporate statism” as others saw the decision as a warning about the direction of Brazil’s fiscal policy.

Salta became the latest Argentine province to wrap up a debt restructuring on Monday after almost all its bondholders agreed to participate in a consent solicitation that will see the maturity on its July 2024s pushed out to December 2027.

Better than expected fiscal data from Mexico has led Bank of America analysts to conclude that the country’s fiscal metrics “could compare favourably to peers for longer” and upgrade their recommendation on the sovereign’s external debt from underweight to market weight.

As Uruguay looks to follow a recent surge of sustainability-themed bond issuance from Latin American borrowers with an ESG bond of its own, one of the options it is weighing up is a sustainability-linked bond — a format that has so far only been used by corporate borrowers.