South America

Brazilian airline Gol Linhas Aéreas Inteligentes is set to continue its deleveraging process as it looks to repurchase the remainder of its bonds due in 2022.

No Latin American borrowers dared to announce bond plans in the short first working week of 2019, but a flurry of pre-Christmas requests for proposals and the prospect of habitual January issuers tapping was enough to make syndicate bankers chirpier.

Latin American bond markets had a predictably quiet start to 2019 as DCM bankers are focussing firmly on next week for any new supply, but early signs suggested that Brazil would continue to be the outperformer.

An appetite for risk is returning to Latin America's equity markets heading into 2019 as worries over the China-US trade war and rates hikes in the latter country ease, according to a Lat Am fund manager survey from Bank of America Merrill Lynch Global Research.

Battling a host of problems — local and global — Latin American bond markets suffered a torrid 2018. Many issuers stayed away, high yielders struggled to find financing and investors booked losses. With more volatility expected, political developments in LatAm’s three largest economies could make or break the region’s bond markets in 2019. Oliver West reports.

NiQuan Energy Trinidad Ltd, the owner of a gas-to-liquids plant in Trinidad and Tobago, held its final conference calls on Thursday and appears to represent the Lat Am DCM market’s last hope of primary activity in 2018, with most bankers now looking towards January.

Paraguay wasp once again the rare consistent provider of good news for Latin America bond markets this week when it earned a credit rating upgrade from Fitch that puts it just one notch off investment grade status with three of the major rating agencies.

Peruvian cement company Cementos Pacasmayo will buy back more than half its dollar bonds after an oversubscribed tender offer.

In this round-up, Trump was confident China would deliver on promises from G20 dinner, China signed several cooperation agreements in Panama and Argentina, China Financial Futures Exchange (CFFEX) planned to lift bans on trading stock-index futures to boost market activity.

Brazilian government-owned oil company Petrobras has said it is looking to deleverage as part of its new five year business plan. But it will still be a regular borrower in capital markets. Furthermore, though some Latin American debt capital markets bankers say their January pipeline is looking bearer than it usually does at this stage of the year, Brazilian public sector issuers could be the one active area of the market.

Peru set the final size of its new 10 year local currency benchmark at Sl10.35bn ($3.06bn) on Friday after allocating some Sl4.438bn of notes to investors participating in a tender for existing bonds.

Brazilian steelmaker Gerdau will buy back $1bn of existing dollar bonds after receiving over $1.345bn of offers from bondholders to participate in a tender offer during the early-bird period, taking advantage of a strong cash position after asset sales and a recent local bond issue.