South America

The run of new bond issues from Latin America credits looks set to extend this week after the slew of corporates from the region to tap the market last week mostly emerged with a combination of slim new issue concessions and positive aftermarket performance.

Latin America has been taking the spotlight in July after a record-breaking quarter for emerging markets bond issuance, but with US elections looming and all-in yields still very attractive, bankers across the emerging market world say there are plenty of reasons for issuers to continue to flock to markets.

Amid warnings about a looming debt crisis in emerging markets, bond investors this week hailed Ecuador as an example to follow in sovereign restructurings, while continuing their showdown with Argentina. Ecuador’s market-friendly philosophy appears to be paying dividends over Argentina’s more confrontational approach, but not every issuer is likely to follow its precedent, writes Oliver West.

Argentina’s largest bondholders on Wednesday evening dashed hopes that the government’s new improved restructuring offer would achieve mass take-up. But some investors took hope from the tone of the creditors’ statement.

Two Colombian companies kept corporate issuance from Latin America ticking with aggressive deals on Wednesday even as bankers reported softer conditions in US investment grade bond markets

Chilean non-bank financial institution Tanner is joining the slew of Latin American companies turning to bond markets as it holds investor calls ahead of a proposed five year amortising note.

Argentine bonds rallied on Monday after the government surpassed expectations with a new debt restructuring offer. But markets are still waiting on the reaction of the largest bondholders, as Argentina had abandoned negotiations ahead of its updated offer.

Brazilian mining giant Vale returned to bond markets after a three year absence on Monday with a 10 year bond that bankers said left investors hungry for more.

After a rush of dollar issuance from Latin American sovereigns, Uruguay — the last of the region’s investment grade countries to turn to bond markets during the coronavirus pandemic — spotted the chance in late June to become the first EM sovereign to issue abroad in its own currency this year. Herman Kamil, director of the country's debt management office (DMO), tells GlobalCapital how the sovereign bucked the trend.

As tensions between Argentina and its largest bondholders climbed this week, the government’s prize asset, oil firm YPF, differentiated itself with a debt exchange that, according to rating agencies, does not punish creditors — unlike the sovereign’s proposals.

Debt capital markets and syndicate bankers covering Latin America say that there is plenty of primary market activity on the way before the end of summer, as new issuance ticked over during the shortened July 4 week.

Banco Internacional del Perú (Interbank) sold a $300m subordinated bond on Tuesday just two business days after its largest domestic rival raised $850m in the same format.