LATAM WRAP-Pemex breaks primary lull, while Brazil sinks
By Davide Scigliuzzo and Paul Kilby
NEW YORK, July 22 (IFR) - Mexico's state-owned oil entity Pemex broke a two-week lull in the primary market for Latin American issuers with a US$525m 10-year bond guaranteed by the US Export-Import Bank.
The Triple A-rated bond did blow a breath of fresh air on a market that up until today had only seen US$1.225bn in supply this month.
In the end, Pemex priced a 2025 amortizer with a 5.63-year average life at par to yield 2.46% or mid-swaps plus 55bp, the tight end of guidance of mid-swaps plus 55bp-57bp.
The pipeline also saw some new arrivals, although they too were hardly pure LatAm plays.
These included Sagicor, an insurance and financial services provider with operations in the Caribbean and the US, as well as Cable & Wireless subsidiary Sable International, which provides telecom services across the region and in the Seychelles.
This came as Brazilian credits suffered another bout of weakness as investors fretted about the government's ability to implement fiscal measures that will prevent Moody's from downgrading the sovereign with a negative outlook.
Markets are already expecting the rating agency to cut Brazil's standing to Baa3 - a notch above junk - but any future price action will depend on whether the rating agency takes a stable or negative view going forward.
Such fears were exacerbated on Wednesday on news that the Brazilian government plans to announce a new primary surplus of 0.15% of GDP, down from the originally budgeted 1.1%. Continuación...