8 de septiembre de 2015 / 19:29 / en 2 años

LATAM WRAP-Mexican REITs to reopen primaries in unsteady market

NEW YORK, Sept 8 (IFR) - Two Mexican real-estate investment trusts, Fibra Uno and Terrafina, forged ahead with roadshows on Tuesday, potentially ending a three-week lull in Latin American issuance.

The appearance of new bond sales on the horizon comes as a welcome relief to bankers who saw just three deals price in August amid a slump in the primary since the start of the year.

Both REITs announced roadshows after the Labor Day holiday, looking to raise new debt ahead of a potential US rate hike when the Federal Reserve meets next week.

But coming at the same time may complicate execution, as they risk cannibalizing demand among investors talking to both credits this week.

Fibra Uno may enjoy the upper hand, given its strong name recognition among accounts who have already bought its bonds. Terrafina will be making its market debut.

“Terrafina is miles behind Fibra Uno, which is best in its class and larger in terms of market cap and market share,” one New York-based trader told IFR.

“Terrafina’s best approach may be to wait for Fibra Uno - and let them do the hard work.”

Overall the market backdrop was unsteady on Tuesday, as investors continue to fret about deteriorating credit metrics across Brazil’s corporate complex.

State-controlled oil company Petrobras was the clear underperformer in this space, with its 2024s widening about 20bp to be quoted earlier to 695bp-685bp.

“There is no bid for Brazil,” said another trader. “The rest of the region is okay, but EM is not feeling the rally we are seeing in equities.”

Still, traders reported some marginal buying among higher quality names from Chile and Mexico.

While downward price pressures in Brazil have been blamed on redemption fears following another US$3bn in outflows at EM debt funds last week, not all traders agree.

“We haven’t seen a lot of forced selling from accounts that got redemptions,” said the first trader.

“If you have to make up this year over the coming months, you are either staying short or committing capital to good names that got thrown out with the bath water,” he said. “I think it will be the latter.” (Reporting by Paul Kilby; Editing by Marc Carnegie)

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