South America

Though Latin America bond markets have so far dodged the brunt of global volatility related to Covid-19, the official name of the coronavirus outbreak, the region’s commodity dependence makes it particularly vulnerable to a China slowdown, say analysts.

Argentina’s economy ministry argued that it was acting with “simple” logic after deciding to include a domestic law dual currency bond owned mostly by foreigners in its external debt restructuring on Tuesday afternoon.

Argentina's plans to restructure $67bn of debt in under two month may look naive to some but the ambition and good communication the government has so far demonstrated point towards a good outcome.

Brazilian hospital operator Rede D’Or became the third Latin American company in a week to tap recently issued bonds as the region’s fixed income markets continue to defy coronavirus-related volatility elsewhere.

Axel Kicillof, the governor of the Province of Buenos Aires, who has an antagonistic relationship with bond investors, was forced into a volte-face on forgoing a debt payment, as Argentina’s new government seeks to maintain a good rapport with markets ahead of restructuring negotiations.

Chilean mobile phone operator WOM took advantage of a better tone in bond markets on Tuesday to add $60m to its 2024 notes, first sold in November.

The Province of Buenos Aires agreed to make an overdue bond payment on Tuesday afternoon to dodge default by just one day, as analysts said Argentina had to avoid creditor conflict to meet a tight deadline to restructure its sovereign debt.

Credivalores, a Colombian consumer and payroll lender, had to navigate a more cautious bond market on Monday to clinch a five year deal that landed exactly where fellow non-bank lender AlphaCredit had priced a trade last week.

A group of Province of Buenos Aires creditors immediately backed the issuer after it significantly sweetened the terms on offer to bondholders in an attempt to dodge a default that could be just two days away.

The Province of Buenos Aires has given itself an extra working day to track down bondholders and persuade them to accept a delay in an amortisation payment as it seeks to avoid a hard default on its debt.

Latin American bond markets reached record levels of January issuance this week as primary activity ticked over despite the scare about the coronavirus, which the World Health Organisation declared a global emergency on Thursday.

Buenos Aires Province has offered more incentives to bondholders to encourage them to accept a three-month delay of a small debt payment. The move makes the Argentine sovereign’s aim to restructure all its external debt by March 31 as ambitious.