South America

Peru on Tuesday became the latest Latin American sovereign to issue in euros and more could be on the way as the region’s borrowers look to make their mark in Europe in case dollar markets become more expensive.

Public sector borrowers have jumped on demand for Brazilian real notes with a flurry of medium term notes — and there is more in the pipeline, said niche currency and MTN bankers.

Brazilian meatpacker Marfrig has completed a tender offer on four of its bonds, spending just over $400m of the $1.21bn in cash it received from the sale of its UK subsidiary on the buyback.

Latin American sovereigns’ march back towards European bond markets continued on Tuesday as Peru achieved its lowest ever coupon on an international bond with its long 10 year. But opinion is split on the value of the euro market.

Peru opened books on its first euro transaction in over a decade on Tuesday morning, while other Latin American sovereigns are eyeing deals in the currency.

Struggling Brazilian telco Oi received a welcome lift in the eyes of its bondholders on Monday after a Russian investment group proposed to invest in the company if it merges with rival Tim.

Peruvian sugar cane producer Corporación Azucarera del Perú (Coazucar) has given bondholders more time to commit to its tender offer as it looks to cut its exposure to the dollar.

Latin America development bank Corporación Andina de Fomento (CAF) has picked leads for a euro transaction and will hold investor calls this week.

Mauricio Macri, the conservative mayor of Buenos Aires, outperformed expectations on Sunday’s presidential elections in Argentina, meaning bond markets may receive a fillip on Monday morning.

Sovereigns and quasi-sovereigns continue to dominate Latin America new issues, as Uruguay this week showed that attractive all-in funding costs are on offer thanks in large part to low base rates.

The prospect of interest rates in Europe remaining low for a long time means that Uruguay is not likely to raise euro-denominated debt “in the very short term”, said a debt official from the country, but the sovereign is looking at the market as a way to continue to diversify its investor base.

A struggling nuevo sol is turning Peru’s companies rapidly away from international bond markets as the issuer of the tightest Peruvian corporate bond ever looks to rid itself of all dollar exposure.