28 de septiembre de 2015 / 19:25 / hace 2 años

LATAM WRAP-Volatility keeps LatAm borrowers on sidelines

NEW YORK, Sept 28 (IFR) - A growing list of LatAm borrowers were sitting on the sidelines Monday as fears over the health of the Chinese economy and the knock-on impact of falling commodities weighed on asset prices.

A rout in the shares issued by commodities trader Glencore and the difficulties faced by borrowers in the US credit markets have only added to the gloom hanging over the Latin American primary market, where the Province of Neuquen abandon its 12-year bond sale on Friday.

And while much of the remaining pipeline comes from favored Mexican credits away from the oil space, bankers are wondering whether such issuers are willing to pay the volatility premiums that investors are likely to demand.

“Spreads are wider and new issue concessions are higher,” said a syndicate official. “There is some sticker shock. If you don’t need the money, your first order of business would be to wait.”

Mexico’s state-owned development bank Bancomext and white goods manufacturer Mabe wrapped up roadshows last week, but have yet to emerge with deal terms, while REITs Fibro Uno and TerraFina have been languishing on the sidelines for several weeks now.

“Bancomext could go, but they may have a tough time coming at these levels,” said a senior DCM banker away form the deal. “That is where you are going to have difficult conversations (with borrowers).”

The resilience some Andean and Mexican names have shown to the broader contagion from Brazil was also showing some cracks on Monday.

America Movil’s 2042s, for example, were being spotted at 220bp-215bp after closing at around 195bp on Friday, said a New York based trader.

Even sovereign debt issued by Mexico, a country praised for quickly proposing budget cuts in the face of falling oil prices, has suffered steep price declines in recent days.

Its 2025s, for example, have fallen about three points in the last 10 days to be quoted at 97.15, while Treasuries spreads have widened about 44bp since September 18 to hit 189bp on Monday, according to Thomson Reuters data.

Meanwhile, in Brazil, Petrobras 2024s were inching lower earlier today to hit 69.50-70.50, while the 2024 issued by RioPrevidencia, the state of Rio de Janeiro’s public pension funds, were down another two points at 62.50 after setting off covenants triggers.


Mexico’s state-owned Bancomext wrapped up roadshows last week through Bank of America Merrill Lynch and HSBC to arrange meetings with fixed-income investors ahead of a potential US dollar-denominated bond sale. A 144A/Reg S transaction may follow.

Mexican white-goods manufacturer Controladora Mabe has finished fixed-income investor meetings through Barclays, Bank of America Merrill Lynch, Citigroup and JP Morgan. Ratings are BB+/BB+.

Mexican real-estate investment trust Fibra Uno has completed meetings with fixed-income investors through Bank of America, Credit Suisse, HSBC and Santander.

Terrafina, another Mexican REIT, has also finished meeting accounts as it markets a potential US$400m-$500m bond offering. The borrower has mandated Barclays and Citigroup as lead managers, with Itau coming in as co-manager. Expected ratings are Baa3/BBB-. (Reporting By Paul Kilby; Editing by Jack Doran)

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