South America

Holders of Avianca’s international bonds are keenly watching the Colombian government’s next move after the airline filed for Chapter 11 bankruptcy protection in New York.

Argentina’s turnaround under former president Mauricio Macri turned out to be a castle built on sand. But as the country heads towards default, the slick execution of its bond market fairytale between 2016 and 2018 could show the Fernández government how to handle investors.

The International Monetary Fund is likely to approve a request from Chilean authorities for a two year flexible credit line (FCL) that the country’s central bank says is being sought “to reinforce the external position in a high risk external scenario”.

Grupo Energía de Bogotá (GEB), the Colombian electricity and gas distributor, tightened pricing sharply on a new 10 year deal as bankers reported huge appetite for the pick-ups being offered by the sturdiest investment grade EM companies.

The Argentina turnaround story under former president Mauricio Macri turned out to be a castle built on sand. But slick execution of the country’s two year bond market fairytale between 2016 and 2018 can provide the new government with some guidance in dealing with investors now it is staring down the barrel of default.

Argentina’s dollar bonds climbed again on Monday after the issuer extended the deadline for a restructuring offer, as a change in tone from the government offered slight hope that an agreement can be reached.

The International Monetary Fund (IMF) looks likely to provide Peru with a flexible credit line of around $11bn as the South American country works to preserve it liquidity position.

Grupo Energía Bogotá (GEB), the electricity and gas distributor majority-owned by the District of Bogotá, Colombia, is looking to hit bond markets to raise around $400m as government-linked issuers dominate the Latin America primary markets.

Colombian airline Avianca filed for Chapter 11 bankruptcy protection in New York on Sunday, the same day that $66m of senior unsecured bonds matured and just five months after wrapping a distressed debt exchange that some thought had brought the airline back from the brink.

Latin American development bank Corporación Andina de Fomento (CAF) tapped US dollar markets for the first time this year on Thursday, raising $800m of three year money that it will use to partially fund a $2.5bn emergency credit line designed to support shareholder countries in dealing with the effects of the coronavirus pandemic.

South American development lender Corporación Andina de Fomento (CAF) offered price talk on Wednesday as it looks become the latest of a select highly rated group of Latin American issuers to tap bond markets.

Chile priced the tightest EM sovereign bond in the Covid-19 era on Tuesday, selling a dollar deal flat or inside its curve and tight to where neighbouring rival Peru had issued last month.