South America

Another torrid week for Brazilian credit had investors predicting the sell-off in the country’s assets had further to run despite some names looking cheap at first glance.

Brazilian low-cost airline Gol Linhas Aereas Inteligentes is considering becoming the second Latin American company to issue EETCs (enhanced equipment trust certificates), a type of secured bond that has become fashionable among airline borrowers.

Latin America bankers observing Colombia’s latest bond issue had no complaints about execution but said that the deal was evidence of the higher concessions that the region’s issuers must pay amid EM and commodity-related volatility.

Brazilian telco giant Oi’s bonds dropped up to 14 points before recovering much of the lost ground as the company hired Rothschild to advise it on its debt profile but denied a restructuring was on the cards.

The People’s Bank of China (PBoC) said on Friday that it has appointed the local branch of Industrial and Commercial Bank of China as the renminbi clearing bank for Argentina. The country becomes the second official RMB hub in Latin America, following the footsteps of Chile.

Troubled Brazilian shopping centre owner General Shopping Brasil has launched a heavily discounted tender of its 10% senior perpetual notes in an effort to reduce its dollar debt, although Fitch says that a debt restructuring is “likely to occur in the near future”.

DCM bankers covering Brazil are hopeful that liability management exercises from financial institutions may provide them with something to do in the coming weeks as the new issue market suffers depressed volumes.

Buy and sell side credit traders expressed disappointment on Thursday, after the US Federal Reserve elected to keep interest rates on hold.

Troubled Brazilian shopping centre owner General Shopping Brasil has launched a heavily discounted tender of its 10% senior perpetual notes in an effort to reduce its dollar debt, although Fitch says that a debt restructuring is “likely to occur in the near future”.

The issuer formerly known as Pacific Rubiales fell just one notch away from triple-C status on Wednesday after Moody’s downgraded the borrower by three notches from Ba3 to B3 and kept it on negative outlook.

Banco do Estado do Rio Grande do Sul (Banrisul) has become the third Brazilian lender to launch a tender offer for existing debt as bond prices in the country hit lows.

The downgrade of Brazil by Standard & Poor’s into sub-investment grade territory on Wednesday had been seen as inevitable for nearly two months. But when it came, the downgrade was as brutal as it could have been.