NEW YORK, Dec 10 (IFR) - Bankers covering Latin America are ready to put 2015 behind them, as a rout in oil prices and more negative headlines out of Brazil indicate December is likely to end with virtually no issuance out of the region.
Hopes that opportunistic borrowers might try to exploit a narrow window before a key Federal Reserve meeting next week were dashed by the latest leg down in oil prices.
International bond issuance volumes out of the region are down nearly 50% this year compared to 2014, according to Thomson Reuters data.
“I can’t think of anyone who would want to put their name out in this market,” said a syndicate banker in New York.
Latin American issuers have so far sold in December a meager US$155m of bonds in the international markets, including a US$100m tap for Argentine state-run oil company YPF and a SFr55m bond issue for regional development bank Cabei.
It is unclear whether a small bond issue for Argentine oil and gas producer Medanito, which wrapped up investor meetings on Thursday, will manage to clear the market against this backdrop.
Lead managers Itau BBA and UBS were yet to release an update on the deal on Thursday.
In the secondary market, Petrobras stole much of the limelight after Moody’s late on Wednesday downgraded its rating on the state-run oil company by one notch to Ba3.
“We have seen kind of mixed feelings on Petrobras,” said Klaus Spielkamp, head of fixed-income sales at Bulltick in Miami.
“They are getting more momentum with the asset sales, which are being more realistic, but the downgrade yesterday brought some selling pressure still.”
Petrobras 2024s were ending the day roughly a point lower at a cash price of 74-75.
Elsewhere in the region, Ecuador’s Finance Minister Fausto Herrera said the country has US$650m ready to repay its Global 2015 bonds in full over the next few days.
That would be the first time Ecuador pays principal on a maturing global issue and would come despite its current struggles to pay local creditors in various sectors.
“The funds are already put aside for the payment of the Global 2015 papers, and payment will be carried out up to the Dec. 15 deadline,” Herrera told reporters in Quito, according to Reuters. (Reporting by Davide Scigliuzzo; Additional reporting by Alexandra Valencia; Editing by Jack Doran)