Window opens for Brazil's first corporate bonds of year
By Paul Kilby
NEW YORK, May 16 (IFR) - The Senate's decision to put former president Dilma Rousseff on trial last week and replace her with market friendly Michel Temer has opened a bond issuance window for Brazilian borrowers seeking to take advantage of recent spread tightening.
Petrobras is on the top of the list of possible issuers following local reports that the state-owned oil company, at the center of a widening corruption scandal, could soon announce a multi-billion dollar trade designed to extend maturities.
Beef companies like Marfrig, petrochemical firm Braskem, steel firm Gerdau, BR Foods and pulp and paper names are also seen as potential issuers.
"I would expect some (Brazilian) names might come over the course of the next few weeks," said a syndicate manager. "A lot of names are being pitched by banks."
Brazilian corporates have not issued a bond in international markets since June last year when telco Oi came to market with a euro bond.
The absence was also driven by a lack of investor interest for Brazilian names after the sovereign was downgraded to junk and the economy went through its worst recession in decades.
A better backdrop now has however made investors more comfortable with the pricing of Brazilian corporate risk.
"The market has now reached a point where there is perception that the political situation has at least stabilized and that corporate risk can be priced with more certainty," said Darin Batchman, a portfolio manager at Stone Harbor Investment Partners. Continuación...