South America

Investors are waiting feverishly for regime change in Venezuela. With US sanctions having stopped trading in the sovereign bonds and those of state oil company PDVSA, investors are unable to alter their exposure to the country.

Corporación Andina de Fomento (CAF) may be playing it safe with its first dollar benchmark of the year, according to investors, amid uncertainty over the political future of Venezuela — one of its shareholders and the country in which it is headquartered.

Corporación Andina de Fomento (CAF) will break the silence of the public sector dollar market this week, after circulating initial price thoughts on Tuesday for its first benchmark of the year in the currency.

Latam Airlines returned to the bond market for the first time in almost two years, printing $600m of seven year paper.

Brazilian airline Gol Linhas Aéreas Inteligentes received just $13.46m of tenders for its outstanding 2022s after having launched a buy-back for all $91.533m.

Investor hopes that the US Office of Foreign Assets Control (OFAC) would retract a ban on US persons buying PDVSA debt were dashed on Friday, when the department made the situation worse for bondholders by adding Venezuelan sovereign bonds to the trading ban.

Brazilian pulp and paper producer Suzano and Chilean copper producer Codelco got Latin American bond markets going this week with smooth dollar deals.

Brazilian lender BTG Pactual will hit the road next week as it looks to capitalise on improving investor sentiment around Brazil, in order to issue a 10 year non-call five Basel III compliant tier two note.

Latin America bond investors cheered moves from the US government to up the pressure on Venezuelan president Nicolás Maduro to leave office this week, but a side-effect of sanctions left PDVSA creditors trapped, to the confusion of many. Oliver West reports.

Pacific Gas & Electric has gone bankrupt with $52bn of debt, blaming forest fires that seared California during 2018. Vale, with $11bn, has been downgraded to the bottom edge of investment grade after its horrific dam burst last Friday.

Following confusion over the effect US sanctions against Venezuelan state oil company PDVSA could have on US bondholders, the final picture is growing clearer and the unfurling scene is not a pretty one.

A fresh round of US sanctions on Venezuela’s government can only squeeze President Maduro further, said bond investors, but meanwhile there was some confusion on Tuesday regarding the apparent ban on secondary market trading of PDVSA debt by US persons.