Pipeline builds in risk-off day for LatAm credit markets

miércoles 24 de junio de 2015 16:47 GYT

By Paul Kilby

NEW YORK, June 24 (IFR) - LatAm borrowers continued to join the bond pipeline ahead of the 4th of July holiday in the US as credit spreads narrowed on Wednesday despite a largely risk-off tone for the region.

While Peruvian development bank Cofide announced roadshows for a possible dollar bond, Santander Chile took the somewhat unusual step of approaching international accounts about opportunities in the local market.

It is thought the Chilean bank is seeking to promote the development of a cross-border local currency bond market, much in the same vein as Mexico, where CFE and Pemex recently issued that country's first Euroclearable local bonds.

Santander Chile itself was the South American nation's first corporate to issue Europeso bonds in 2010, a 6.5% 2020 that was largely retired through a tender early last year when investors were seeking to offload illiquid local currency debt.

Indeed, bankers continue to question the appeal of such trades at a time when LatAm currencies have taken a beating against the US dollar, and believe that such a trade from Santander Chile is unlikely.

"I don't think international investors would buy Santander's local bonds," said a banker. "They barely buy the Republic's or the Central Bank's (local) paper."

The Chilean government has been talking to international accounts about participating in local auctions and has encouraged banks to do the same, he added.

Elsewhere in the secondary market, uncertainty over the outcome of Greek debt talks has put investors in a more cautious mood on Wednesday.   Continuación...