Brazil woes cast shadow on LatAm corp bond issuance
By Paul Kilby
NEW YORK, March 5 (IFR) - With the corruption scandal surrounding Petrobras effectively shutting Brazilian corporates out of the bond markets, bankers say it will be a while before LatAm issuance regains momentum.
Across the region, the primary markets are bracing for a relatively slow year ahead, even though many of the technicals are constructive and the tone is generally positive.
"With Brazilian issuers out of the market, that has taken out about a third of the supply we have seen over the last couple of years," one banker told IFR. "That is a lot."
To be sure, Mexican and Andean corporate issuers may fill some of the gap left by the dearth of Brazilian trades.
Cheap money is still up for grabs in the dollar market and investors are on the hunt for corporate assets after being starved of supply this year.
Against that backdrop, more borrowers are likely to be goaded into issuing before the Fed moves to hike short-term rates.
"Arguments are positive for those corporates looking to come to market before the rate cycle starts ticking up," said a syndicate official.
So far in 2015, however, corporates have accounted for just about US$3.7bn of the roughly US$22bn raised in Latin America this year, with sovereigns and quasi-sovereigns dominating supply. Continuación...