South America

Energy company Medanito will hit the road this week to meet fixed income investors ahead of a maximum $150m deal as Argentine borrowers continue to show interest in international markets despite the small size of most companies in the country.

Argentina’s issuers are wasting no time returning to international capital markets after Mauricio Macri’s victory in the November 22 presidential elections, though Lat Am bond bankers warned that tough times remained ahead for the country.

Huw Jenkins will need all of his powers of persuasion and banking know-how if BTG Pactual, where he is a founding partner, is to halt its downward spiral.

Brazil iron ore pellet producer Samarco Mineração’s bonds hit the mid 30s on Tuesday as Fitch reduced the borrower’s rating from BBB to BB- a month after two of the company’s dams burst in the state of Minas Gerais, causing heavy human and environmental damage.

André Esteves resigned from his positions as chairman of the board and chief executive of BTG Pactual on Sunday following his arrest on November 25 as part of Brazilian authorities’ investigation into corruption at Petrobras.

Banco Nacional de Desenvolvimento Econômico e Social (BNDES) has bought 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.

The arrest of BTG Pactual’s chairman and chief executive dragged the Brazilian banking sector into the Petrobras corruption investigation this week, as bond market participants said fears were running high that Lava Jato would uncover even more skeletons in the closet.

Argentina will offer a rare high point for Latin American new issuance volumes next year, predict bankers and investors, after voters in South America’s second largest economy elected the most business friendly candidate as their next president.

The arrest of one of the most respected figures in Latin American banking on Tuesday could be the start of a new painful chapter in Brazil’s corruption scandal, Latin American bond market participants have warned.

Mortgage lender Banco Hipotecario on Tuesday sold the first international bond from Argentina since Mauricio Macri was elected president, as optimism continues to be tempered by the challenges the leader will face.

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.