Mexico

Mexican oil giant Pemex and north African sovereign Tunisia both used the euro market for diversification plays this week, though the differing receptions each received highlighted the difficulties faced by EM high yield borrowers using the currency. Olly West and Virginia Furness report.

Even heavy indications from US Federal Reserve chair Janet Yellen the central bank will raise interest rates at its next meeting were not enough to derail the strong primary market in emerging market bonds.

European bond investors gave Mexico’s prospects a vote of confidence on Tuesday, placing €17.6bn of orders as state-owned oil giant Pemex raised €4.25bn of debt in the largest ever euro-denominated trade from an emerging markets issuer.

Mexico’s state owned oil company Pemex has turned to the euro bond market just two months after becoming the first Latin American borrower to sell a bond at all after the election of Donald Trump as US President.

Food producer Sigma Alimentos, a subsidiary of Mexican conglomerate Grupo Alfa, sold the first Mexican new issue of 2017 on Thursday — increasing the size from €500m to €600m and tightening pricing 25bp-37.5bp from guidance.

Food producer Sigma Alimentos, a subsidiary of Mexican conglomerate Grupo Alfa, emerged with pricing for a seven year euro benchmark on Thursday morning.

Grupo Alfa-owned food company Sigma may finally bring the first Mexican bond deal of 2017 next month. As Donald Trump’s ascendancy to the US presidency engulfs the country in uncertainty, DCM bankers say issuers are calm despite the lack of activity.

Multinational food company Sigma Alimentos is preparing ground for what is likely to be the first new issue from a Mexican borrower since Donald Trump became president of the United States.

Six Latin American issuers attracted more than $45bn of orders between them this week as the region’s bonds markets looked set to open Donald Trump’s term as US president in flying form.

Years of sub-par growth may finally hurt the ratings of Latin America’s two strongest economies, after Fitch placed Mexico and Chile’s ratings on negative outlook.

It’s that time of year when analysts dust off their crystal balls and make predictions for the next 12 months. In December 2015 not many were forecasting that Britain would vote to leave the EU, and even fewer were betting on a Donald Trump presidential victory, so investors would be wise to treat such missives with caution. Political risk is a capricious beast, even for the most seasoned market observers.

Fitch has partially blamed Donald Trump’s election as US president for hurting Mexico’s economic prospects after it became the third major rating agency to place the sovereign’s credit rating on negative outlook this year.