Mexico

Emerging market bond conditions got worse and worse this week as investors struggled to sell bonds quickly enough to keep up with outflows. Though some investors said they had lined up a shopping list of cheap purchases, it could be some time before they decide to pounce.

Even the top-rated emerging markets corporates are mostly preferring to keep cash on hand rather than take advantage of a sharp fall in bond prices to repurchase debt cheaply, bond bankers said this week.

Latin America bond issuers and investors were thrown deeper into the coronavirus crisis on Monday, with Friday’s spread tightening more than cancelled out as the US Federal Reserve’s surprise 100bp rate cut on Sunday failed to arrest a fall in risk assets.

Bond syndicate bankers covering Latin America were not ruling out a return of new issuance in the next two weeks as the market tone improved on Tuesday after a bleak Monday. But with fears around negative fund flows growing, it may be hard to persuade investors to put cash to work even if valuations look attractive.

On what some EM investors described as the worst day for markets since 2008, Latin American bond buyers were left staring at a sea of red as the region’s fixed income markets were stunned into dysfunction by the sharpest fall in oil prices since 1991.

Mexican hotel operator Grupo Posadas became the first Latin American issuer to suffer a ratings action as a direct result of the Covid-19 coronavirus outbreak, with both tourism industry and capital markets conditions worsening while a bond maturity looms.

Mexican non-bank lender AlphaCredit has launched a consent solicitation, as it seeks to make amendments to the indenture governing its 2022 notes.

Mexico’s state-owned electric company Comisión Federal de Electricidad (CFE) turned to Taiwan’s bond market this week to sell a dollar bond — its latest foray into the Formosa bond market.

Mexico state-owned utility Comisión Federal de Electricidad (CFE) returned to the Formosa market for the fourth time on Wednesday, clinching its largest trade yet in Taiwan.

Mexican polyethylene producer Braskem Idesa’s 2029s were the worst performing bonds in emerging markets on Wednesday after the country's president Andrés Manuel López Obrador said he was analysing whether he could break a contract under which Pemex supplies the company with ethane.

The Mexican finance ministry will visit fixed income investors in Europe next week to present the framework under which it hopes to issue bonds designed to finance expenditure in line with the United Nations’ Sustainable Development Goals.

Mexico’s second largest lender Banco Mercantil del Norte (Banorte) returned to the Swiss franc market for the fourth time in under two years on Monday.