South America

A group of bondholders holding more than a quarter of the Province of Neuquén’s senior secured bonds said on Friday that they “categorically” reject the Argentine regional government’s restructuring proposal.

Real money investors have historically avoided the reputational risk involved in participating in sovereign debt restructurings. But a truly socially responsible investor should embrace these situations — for the sake of both their clients and troubled emerging nations.

Entre Ríos will become the latest Argentine province to begin negotiations with bondholders after the national government’s restructuring agreement last week left the path clearer for provincial issuers.

Chilean state railway operator Empresa de los Ferrocarriles del Estado (EFE) debuted in international bond markets on Tuesday, achieving the lowest yield ever achieved by a Latin American corporate on a 30 year issue on the back of an eight times oversubscribed order book.

Real money investors have historically avoided the reputational risk involved in participating in sovereign debt restructurings. But a truly socially responsible investor should embrace these situations — for the sake of both their clients and troubled emerging nations.

Latin American development bank Corporación Andina de Fomento (CAF) raised Sfr350m ($382m) of five year paper on Monday with its first green bond issue in the Swiss franc market.

Argentine oil and gas company Compañía General de Combustibles (CGC) is looking to tackle a looming bond maturity with an exchange offer, following the example of YPF and Telecom Argentina.

Empresa de los Ferrocarriles del Estado (EFE), the only operator of long distance passenger railways in Chile, is looking to debut in international bond markets with a 10 or 30 year bond of up to $500m.

The unprecedented central role real money investors played in debt talks with Argentina and Ecuador could change the nature of sovereign restructuring, experts said, after the two countries this week reached agreements with creditors over billions of dollars of bonds. Oliver West and Ross Lancaster report.

Several corporate issuers in Latin America could be on the cusp of losing their investment grade status, warned Fitch Ratings on Wednesday, with commodities-related businesses at particular risk.

Telecom Argentina said on Tuesday that it would issue nearly $389m of amortising bonds maturing in 2025 as a result of a successful debt exchange and raising $135m in new money.

As Argentina’s largest bondholders confirmed that they would support the government’s amended restructuring offer, the sovereign gave investors until August 24 to participate in the deal, with analysts expecting a high take-up.