South America

Not all emerging markets bond bankers may agree with the strategy — with certain deal-hungry New York dealers particularly vociferous in their opposition — but Latin American sovereigns are placing increasing faith in the euro market for their international funding, writes Oliver West.

Brazilian bonds rallied on Wednesday afternoon after the country's treasury secretary told local press that the sovereign was considering buying back foreign bonds in what DCM bankers said was likely to have been a deliberate response to a ratings cut from Moody’s in the morning.

Latin America sovereigns’ new found fancy for euro denominated bonds has sparked fierce words from syndicate bankers defending and questioning the trend.

Argentina's finance minister, Alfonso Prat-Gay’s announcement that the country would issue up to $15bn of bonds to pay holdout investors cooled enthusiasm for the sovereign’s existing debt on Tuesday.

Peru opened books on its second euro deal in four months on Tuesday, after announcing an investor call on Monday which caused its secondary curve to widen 20bp.

The Republic of Peru could become the third Latin America sovereign to issue in euros in 2016 after holding an investor call at 10.30am UK time on Monday.

With a four hour presentation, and after two years of broken promises, Venezuelan president Nicolás Maduro finally announced economic reforms on Wednesday. But although bonds rallied slightly, analysts saw the measures as too little, too late.

Santander’s Chilean arm has launched a tender offer for up to $500m on its 3.875% fixed rate 2022s and its floating rate notes due 2018.

A strong performance in Brazil’s bond curve on Wednesday underlined how unsurprised bond investors were to see Latin America’s largest sovereign receive yet another rating downgrade.

Santander’s Chilean arm has launched a tender offer for up to $500m on its 3.875% fixed rate 2022s and its floating rate notes due 2018.

Colombia’s sovereign bonds closed tighter on the day on Tuesday despite lower oil prices driving Standard & Poor’s to place the government’s BBB credit rating on negative outlook.

Argentina may be able to access international capital markets even if US creditors continue to reject restructuring proposals, said analysts this week.