South America

Debt capital markets bankers expect the Argentine government to mandate dealer-managers on its mega distressed debt exchange by early next week, as they plan for a complex transaction in which size could make up for low fees.

Latin American bond bankers are putting on brave faces as the Covid-19 epidemic threatens to thwart what several sell-side houses say is an exceptionally busy March pipeline.

As volatility finally hit Latin American primary markets, the only action from the region’s issuers this week came through liability management, with Peruvian miner Nexa and Brazilian airline Gol both prepaying bonds.

Nexa Resources Perú, the mining company previously known as Compañía Minera Milpo, will buy back more than half of a dollar bond maturing in 2023 as it’s set to wrap a tender offer.

Global market volatility triggered by fears surrounding Covid-19 outbreak, finally hit Latin America bonds on Monday just as bankers said they are preparing another heavy wave of issuance.

Brazilian airline Gol said on Friday that it would be redeeming in March a bond it had tried — and mostly failed — to repurchase a year ago.

The IMF’s call for a “definitive debt operation yielding a meaningful contribution from private creditors” in Argentina only triggered a slight fall in sovereign bond prices as investors said there was little new in the statement. But fears are rising that the country is facing a lengthy restructuring process.

Brazilian pulp and paper company Suzano is working on structuring a bond that would reflect its commitment to sustainability. But its chief financial officer told GlobalCapital that the green bond market was unable to maximise the impact capital markets could have on sustainability.

Chilean power generator Colbún will begin investor meetings on February 21 with the publication of full year financial reports set to trigger a second wave of new Latin American issuance for the year.

Latin America’s largest private sector lender Itaú returned to bond markets for the second time this year, following up January’s senior unsecured deal with an additional tier one perpetual note that was five times oversubscribed.

The US Treasury slapped sanctions on a Rosneft subsidiary on Tuesday for brokering sales of Venezuelan crude oil that supported president Nicolás Maduro’s government. Some expect this to be the first of similar actions, in the run up to the US presidential election.

Colombia consumer and payroll lender Credivalores will buy back nearly $155m of its senior unsecured bonds maturing in 2022 after completing a tender offer for the notes.