South America

The City of Buenos Aires is set to sell up to $890m of bonds as soon as Tuesday as it looks to take advantage of what one Buenos Aires-based banker described investors as “drunk” on Argentina risk.

Mortgage lender Banco Hipotecario took advantage of the momentum surrounding Argentine bonds on Wednesday with a tap of its senior unsecured 2020s more than six and a half points above where they were first sold in November.

Argentina made its debut in the international capital markets 192 years ago. It has managed eight defaults since then, so are things any different now?

Latin American DCM bankers drew positive conclusions from Petrobras’ first international bond in nearly a year as the Brazilian state oil giant raised more than twice what it needed to for a liability management exercise.

Banco Hipotecario is set to demonstrate the immediate benefits that Argentina’s corporates could receive from the sovereign’s return to bond markets when it taps its 2020s on Tuesday.

The City of Buenos Aires is set to become the third Argentine sub-sovereign to tap international bond markets since the sovereign sold $16.5bn of debt in April.

Brazilian bonds ended roughly flat on Thursday after a majority of senators voted for an impeachment trial of president Dilma Rousseff as many investors said the move was already priced in, but there was enthusiasm among bankers about the possibility of a renaissance in issuance from the country.

Bankers said that Argentina’s grand capital markets plan was functioning perfectly after Mendoza became the second province to tap international capital markets since the sovereign raised $16.5bn in April.

Peruvian power generation company Kallpa Generación could become the latest Latin American company to sell debt as corporate issuance in the region goes through a relative revival.

Lat Am DCM bankers had held hopes that FDN itself would tap international bond markets this year, but with the proceeds from the sale of state energy company Isagen set to be used to provide the development bank with nearly $1bn of regulatory capital, these plans have been postponed.

The CEO of the Colombian development bank in charge of leading financing for the country’s flagship 4G infrastructure programme told GlobalCapital he was upbeat about progress as he revealed a second international bond related to the programme was in the works.

The province of Mendoza was heard to have built a twice subscribed order book the day before pricing an eight year amortising bond that would make it the second Argentine issuer to have tapped international investors since the sovereign returned to the market in April.