| Photo: Petrobras |
A spree of bond sales from Latin American companies looks set to continue, with a string of borrowers meeting investors in the days ahead.
Chile-based Latam Airlines, heard to issue a $500m bond on Thursday, is the latest issuer to have tapped the cross-border debt market. It follows a bond sale this week from Province of Buenos Aires and a 100-year instrument from Petrobras on Monday, which stunned observers with its boldness.
Others are lining up.
“It’s the right time,” said a DCM source. “These deals will be well-received and I think if I were a high-grade issuer I would be looking at it too.”
The government of Honduras and CAF are planning a return to either the dollar or euro markets in the coming months, and Mexican development bank Bancomext is mulling a bond sale, which would be its first in international markets since 2004.
“It would be an important step for the bank to return to the international markets after ten years, because now we have a very interesting story to tell,” Miguel Siliceo, Bancomext’s chief financial officer, told LatinFinance recently.
Brazilian telco Oi started European investor meetings on Thursday, while El Salvadorian lender Banco Agrícola will start a roadshow on Friday. Metro de Lima Línea 2 is meeting investors in the US and London. Brazilian aircraft maker Embraer also recently finished investor meetings, and was heard to be looking for a benchmark dollar transactions.
The roadshows follow a pick-up in activity in the bond market in recent weeks after what one sovereign debt official described as a “very strange”, and somewhat concerning, month of trading in April.
Emerging market borrowers are being encouraged to jump in the market soon, before rates rise, said another DCM source. “[They should] take advantage of the fact that rates are still low and spreads are still low,” the source said. “Buenos Aires is a pretty good example, pricing a coupon below 10%. It could be paying 11% in six months.” LF