24 de junio de 2015 / 20:51 / en 2 años

Pipeline builds in risk-off day for LatAm credit markets

NEW YORK, June 24 (IFR) - LatAm borrowers continued to join the bond pipeline ahead of the 4th of July holiday in the US as credit spreads narrowed on Wednesday despite a largely risk-off tone for the region.

While Peruvian development bank Cofide announced roadshows for a possible dollar bond, Santander Chile took the somewhat unusual step of approaching international accounts about opportunities in the local market.

It is thought the Chilean bank is seeking to promote the development of a cross-border local currency bond market, much in the same vein as Mexico, where CFE and Pemex recently issued that country’s first Euroclearable local bonds.

Santander Chile itself was the South American nation’s first corporate to issue Europeso bonds in 2010, a 6.5% 2020 that was largely retired through a tender early last year when investors were seeking to offload illiquid local currency debt.

Indeed, bankers continue to question the appeal of such trades at a time when LatAm currencies have taken a beating against the US dollar, and believe that such a trade from Santander Chile is unlikely.

“I don’t think international investors would buy Santander’s local bonds,” said a banker. “They barely buy the Republic’s or the Central Bank’s (local) paper.”

The Chilean government has been talking to international accounts about participating in local auctions and has encouraged banks to do the same, he added.

Elsewhere in the secondary market, uncertainty over the outcome of Greek debt talks has put investors in a more cautious mood on Wednesday.

Against that backdrop, the new 2026s issued by Colombian oil entity Ecopetrol was trading somewhat flat at around 99.75-99.85 or around 301bp over US Treasuries after being priced yesterday at 99.328 or 305bp over.

In Brazil, however, bonds issued by Odebrecht have come off recent lows after plummeting last week following the arrest of the construction company’s CEO in connection with the corruption scandal swirling around oil entity Petrobras.

The issuer’s 2025s were being quoted on Wednesday at 80.50 after falling to around 74.00, while the 2022s, backed by drillships on charter to Petrobras, were about six points higher than recent lows at 77.00.

“Odebrecht bonds are not yet cheap enough for the distressed guys and the investors who hold them don’t know what to do,” said a banker. “It has a good balance sheet but it suffers from headline risk.”


Peruvian development bank Corporacion Financiera de Desarrollo SA (COFIDE) has mandated Citigroup, Morgan Stanley and Standard Chartered to roadshow a possible US dollar 144A/RegS bond sale.

The borrower, rated BBB+/BBB+, will start meeting investors in Los Angeles on Thursday and head to Boston on June 26, London on June 27 and wrapping up in New York on June 30.

Banco Santander Chile has mandated Deutsche Bank and Santander to arrange global fixed-income investor meetings to discuss opportunities in the domestic Chilean markets.

The bank, rated Aa3/A/A+, will be in London on July 6, in Boston on July 7, in New York and nearby on July 8 and 9, finishing up in Los Angeles on July 10.

The bank, rated Aa3/A/A+, will be in London on July 6, in Boston on July 7, in New York and nearby on July 8 and 9, finishing up in Los Angeles on July 10.

Grupo Posadas ends roadshow today in New York through Citigroup, Bank of America Merrill Lynch and JP Morgan ahead of a possible USD 144A/Reg S bond sale. The company is rated B2/B/B+ by Moody‘s/S&P/Fitch.

The company has announced a consent solicitation and cash tender for US$310m in outstanding 7.875% 2017s. Holders who tendered by July 24 will receive US$1,060 per US$1,000 principal amount. Thereafter but before final expiration of July 10, holders get US$1,030.

Jamaica also wraps up roadshows today in Amsterdam via Citigroup. The country, rated Caa2/B/B-. Meetings are being described as a non-deal roadshow, but markets have been expecting the sovereign to raise funding to retire a PetroCaribe loan owed to Venezuela. (Reporting By Paul Kilby; editing by Shankar Ramakrishnan)

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