High-Grade Hopes Up on Pemex

Positive response to Pemex’s $2bn 8% of 2019 bond placed Tuesday and Codelco’s $600m 7.5% of 2019 bonds last week provide encouragement for high-grade LatAm corporates. With fellow quasi-sovereign Petrobras widely tipped to bring a benchmark-sized bond to meet increasing investment needs, the big question is whether investment-grade names not attached to governments can now issue. “The window is getting wider, but we don’t know how wide,” Aaron Holsberg, head of LatAm corporate research at RBS tells Latin Finance, noting that the big picture still is one of global crisis. “The sovereigns did better than expected, and if the quasi-sovereigns are well-digested, it could open the way for high-grade,” he adds. BNDES and CAF are in the pipeline and there are other sovereigns to come. It remains to be seen which blue chip sets the benchmark for LatAm corporates.