South America

Argentina has been a pariah among international creditors for years, but its new, pro-business president may reopen the door to foreign investors — the question for derivatives players is how they can take part.

Emerging market bond investors say that Argentine lender, Banco Hipotecario could this week price a $250m five year deal in what would be a stern test of market appetite for the country following Mauricio Macri’s election as president.

Banco Nacional de Desenvolvimento Econômico e Social (BNDES) will buy back $640m of senior unsecured notes at a discount, taking advantage of sub par dollar prices and its strong cash position to reduce its debt burden.

Mauricio Macri’s victory in Sunday’s Argentine presidential elections signals a new era for the country and should lead to a further rally in the sovereign’s bonds, at least in the short term, say market analysts.

Banco Nacional de Desenvolvimento Econômico e Social (BNDES), the Brazilian government-owned development bank, on Monday became the latest financial institution from the country to look to take advantage of depressed bond prices by repurchasing debt below par.

With the most business-friendly candidate boasting a lead of at least eight points in opinion polls ahead of the second round of Argentina’s presidential elections this Sunday, bankers are hoping Argentina can once again play an important role in Latin American bond markets.

Brazilian iron ore producer Samarco Mineração’s bonds recovered slightly on Monday despite the issuer’s owners giving mixed signals regarding its attitude to the crisis-ridden company.

Banco Nacional de Desenvolvimento Econômico e Social (BNDES), the Brazilian government-owned development bank, on Monday became the latest financial institution from the country to look to take advantage of depressed bond prices by repurchasing debt below par.

Fitch has cut the credit rating of Pacific Exploration and Production (formerly Pacific Rubiales) by two notches from B+ to B- and placed the issuer on rating watch negative after the agency revised its oil price outlook.

It is already evident that the human and environmental impact of last week’s burst dam at an iron ore mine in Minas Gerais, Brazil, will be tragic. But those left with the uneasy task of analysing the financial fallout on the company that operated the mine still have more questions than answers as the bonds sold off 30 points.

Goldman Sachs this week announced the closure of its dedicated BRIC (Brazil, Russia, China and India) fund after nearly 10 years. The move signalled the end of the BRIC era, as this year saw recessions plague Russia and Brazil while growth in China stalled.

The level of support that Brazilian iron ore pellet producer Samarco Mineraçao’s high profile shareholders provide the company could determine just how serious the effects of last week’s dam accident will be, said Fitch on Wednesday.