South America

Santander Chile, which sent a strong message about its financing capabilities with two consecutive deals immediately after the US election result, will adapt to the Trump era with more international bond issuance, the bank’s CFO told GlobalCapital.

Whether PDVSA bondholders choose to believe JP Morgan’s EM research team, or if they agree with the Venezuelan company’s CEO that the US bank is an “enemy of the fatherland”, they cannot have had a particularly reassuring run-up to Thanksgiving, after the borrower’s coupon payments went missing. Oliver West reports.

The row over PDVSA’s late coupon payments ran into Tuesday with the Venezuelan state oil giant’s CEO claiming that the company had met with “all of its bond payments”.

Venezuelan state oil giant PDVSA (Petróleos de Venezuela) failed to make $539m of coupon payments on three bonds last week, activating the 30 day grace period on its 9% 2021s, 6% 2024s and 9.75% 2035s.

Santander Chile, which sent a strong message about its financing capabilities with two consecutive deals immediately after the US election result, will adapt to the Trump era with more international bond issuance, the bank’s CFO told GlobalCapital.

Banco Santander Chile has responded to a reverse enquiry by printing a Sfr125m ($125m) May 2025 bond. Riding off Chilean reputation in the Swiss market, and a scarcity of LatAm offerings this year, the lead managers kept the tickets tightly priced.

Donald Trump’s shock victory in the US presidential elections was no obstacle to Santander’s Chilean arm as the bank became the first issuer from the South American country to raise financing in Taiwan’s Formosa market.

Donald Trump’s shock victory in the US presidential elections was no obstacle to Santander’s Chilean arm as the bank became the first issuer from the South American country to raise financing in Taiwan’s Formosa market.

Bankers said that none of the three names in the visible Lat Am pipeline would be likely to issue any time soon as a sell-off in US rates brought sudden volatility to EM bond markets, even in economies not considered affected by a Donald Trump presidency.

Argentina’s return to international bond markets this year broke many records, and its after-market performance has been equally stunning. It has also changed investors’ concerns. Previously preoccupied with court rulings, an unpredictable government, legal technicalities and a curve comprising an assortment of complex instruments, bondholders now are looking at more conventional credit issues and can enjoy a normalised dollar curve with several liquid points. The buyside is now assessing inflation and inflation expectations, GDP growth and FDI, and — crucially — progress on the fiscal deficit.

Luis Caputo had been head of LatAm trading at Deutsche Bank and JP Morgan, but he’d never done a deal as important as the one facing him at the start of 2016. Few — if any — bankers ever do. Argentina’s finance secretary, known in the market as “Toto”, led the nation’s negotiations with holdout creditors, achieving a faster and cheaper resolution than most expected. This has left Caputo confident that the government will be able to do just as good a job in tackling the outstanding issues facing the economy.

Mauricio Macri’s government is having to find a fine balance between fiscal consolidation and suffering too much short term economic and political damage. Markets appear willing to finance gradual change, and economists back the government’s strategy, but improvements need to come quickly.