LatAm primary bond market moves into high-gear amid risk-on bid

miércoles 29 de junio de 2016 14:26 GYT

By Paul Kilby

NEW YORK, June 29 (IFR) - Latin American primary markets sprung to life on Wednesday after five issuers moved forward with bonds amid an improving backdrop for the region's borrowers.

The Dominican Republic launched a US$500m tap of its 6.875% 2026s, while Argentine confectionary company Arcor, the Province of Salta, and Brazilian beef name Marfrig were also tapping the primary market on Wednesday.

Colombian road concessionaire Costera has also opened books on a dual-currency trade ahead of pricing on Thursday, while Argentine oil company YPF has done the same on an unusual peso-linked four-year bond denominated in dollars.

Chilean utility Transelec is also preparing roadshows for next week.

With broader markets extending gains on Wednesday as immediate concerns fade about the UK's exit from the European Union, Latin American issuers have been quick to come off the sidelines to lock in low interest rates.

Yields on the 10-year Treasury hovering around four-year lows at 1.46% despite a renewed bid for risk assets and LatAm assets have recovered from a recent rout caused by the Brexit vote on Thursday.

"Most stuff is back to pre-Brexit levels when they were already close to the best levels year to date," said a syndicate manager. "Brexit volatility had delayed issuers but now they are starting to revive (deals)."

The buyside meanwhile has money to put to work after raising cash in preparation for redemptions post Brexit and see further upside in EM as the hunt for yield continues amid accommodative monetary policies across the developed world.   Continuación...