South America

Two prospective bond issuers from Latin America cancelled their fundraising plans this week as external conditions raise borrowing costs for EM issuers.

Chilean state owned lender BancoEstado raised $200m-equivalent of debt in Asian markets this week to reach the half way mark of its $1.6bn medium-term funding needs for the year.

Unigel, the Brazilian petrochemicals company, completed an inaugural international bond sale on Tuesday in a deal with a highly targeted distribution after drastically sweetening terms for investors.

Peruvian agricultural company Camposol cancelled a proposed tender offer for existing bonds on Monday evening after failing to raise the debt required to finance the buyback.

Unigel, the Brazilian petrochemicals company, has set initial price thoughts on a planned inaugural international bond two months after it aborted a first attempt.

Colombia’s highest rated issuer, Empresas Públicas de Medellín (EPM), is in danger of a downgrade after troubles in the construction of its planned Ituango hydroelectric plant, the largest infrastructure project in the country.

No Latin America companies issued and just one announced bond plans this week as an EM currency slump sent shivers through the market, but investors said the market was far from shut.

Argentinian president Mauricio Macri’s politically bold but economically astute move to approach the IMF for financing lifted bond prices on Thursday, but markets are continuing to digest a shock period of volatility that has caused drastic reassessments of emerging market debt’s standout story in recent years. Olly West reports.

The last two weeks have been the toughest in recent memory for emerging market bond investors who have seen their assets in local currencies and dollars alike take a hammering amid the collapse in the Argentine peso and Turkish lira.

Following another tough day for Argentine bonds, the country’s economy minister Nicolás Dujovne clarified after market close on Wednesday that the government was seeking a stand-by agreement from the IMF.

Empresas CMPC, the Chilean pulp and paper company, is the ideal company to venture into uncertain bond market waters, syndicate bankers said after the company announced roadshow plans.

Market pressure on Argentina in recent weeks drove President Macri to take what initially felt like a radical step by roping in the IMF. But what first seemed like a horrific déjà vu is actually a sign that things are getting better in the most underperforming EM nation.