South America

Iochpe Maxion, the Brazilian group that makes more vehicle wheels than any other company in the world via its Maxion Wheels division, said on Friday that it is considering turning to cross-border bond markets for financing.

Spain is often held up as an example of how austerity works, and Markit data published on August 5 provides some support to this view.

Bond market participants were left pondering whether the sell-off in Brazilian assets had been exaggerated after a negative outlook from Standard & Poor’s triggered a rally and stabilisation in credit spreads in the country.

Credit default swaps referencing Brazil hit their widest levels of the year this week, with the continuing crash in commodities weighing heavily on those names most exposed and adding to a raft of other woes for the country.

The recent commodity downturn has sent LatAm corporate bond yields surging, just as the US looks set to raise interest rates.

CEEMEA supply is stumbling, with the week’s tally at one deal priced and one deal pulled. But Latin American offers hope of more fresh paper, with Mexican, Brazilian and Caribbean corporates all readying deals.

Brazil and Standard & Poor’s rating actions have a peculiar relationship. In March 2014, S&P downgraded the sovereign to BBB- but the bond market subsequently rallied as the rating agency offered a stable — rather than negative — outlook.

Fitch removed the positive outlook from privately owned Brazilian bank BTG Pactual’s ratings on Monday, saying the deterioration in the operating environment in Brazil outweighed the positive effects of the acquisition of Swiss private bank BSI.

Credit default swaps referencing Brazil have hit their widest levels of the year, with the continuing crash in commodities weighing heavily on those names most exposed and adding to a raft of other woes for the country.

Brazilian credits had yet another tough day on Friday to complete a torrid week for the country in bond markets. The rough ride has put at least one issuer off of coming to market.

A torrid week in secondary markets for Brazilian credits meant that no bankers were surprised that industrial conglomerate Cosan opted not to issue on Thursday having completed investor meetings on Wednesday ahead of a planned 144A/Reg S deal.

Caribbean island nation Jamaica filed a bond shelf with the SEC for issuance of up to $3bn on Tuesday, taking it one step closer to a much anticipated deal that would be at least partly used to finance PetroCaribe loans owed to Venezuela.