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26 Jun 2017   Americas, Macro, Deals

Argentina’s Bond Ambitions May Lead to Century of Economic Pain

Argentina continued its debt bonanza this month as it joined a handful of countries to offer a unique 100-year bond that proved to be an unbelievable success with investors. But as the country’s debt pile grows, some analysts have begun to wonder whether Argentina could fall victim to its own success.

Venezuela State Asset Firesale Continues Amid Hard Currency Shortages

Even as Venezuela continues to get rid of its last remaining financial assets in its quest for fresh cash; analysts believe that a default in the crisis-struck nation is just a matter of time

Latin America Credit Markets Brief: June 9 – June 22

Navistar Financial tapped the local markets – Temer denies corruption allegations – IFC is investing in Banco Industrial do Brazil – Temer received another setback in the Senate – Argentina issued a 100-year bond – MSCI snubbed Argentina – Davivienda issued a triple- tranche bond in the local markets – Chile issued a US$1.2bn bond – Panama’s inflation eased – Petroperu tapped the international markets – Venezuela fails to pay debt

CASE STUDY: Minerva Sees Aggressive Pricing on US$1bn Bond

Brazil beef giant tapped Minerva took advantage of favourable conditions in emerging markets to sell a US$1bn bond due 2026, which priced inside the company’s yield curve at 6.625%.

CASE STUDY: Wheeler-Dealer Iochpe Maxion Rolls Out a US$275mn Syndicated Loan

In the Summer of 2016, automotive wheel producer Iochpe Maxion led by example to become one of the few Brazilian corporates to tap the dollar denominated syndicated loan market with a US$275mn dual-tranche term loan facility that was 43% oversubscribed.

Brazil: The Central Bank Got It Right

Central bankers in Brazil don’t have easy lives, as shown by recent events. Just when the economy seemed to be heading in the right direction, up pops another political crisis that has increased uncertainties – particularly on the reform front. The social security reform is the main focus, due to its consequences on the government’s solvency, but monetary policy is very much in play.

Brazil: Where Fiscal and Monetary Priorities Need Alignment

The signals sent by the Planalto are that President Temer intends to dig in and fight to preserve his mandate. There is some room for this, politically and economically. Although his situation is difficult, there is no climate of “Down with Temer” in the same way “Down with Dilma” manifested. The probable reason is the gradual recovery of consumer and business confidence. The pattern of net layoffs has been interrupted, and the unemployment rate shows signs of stabilizing much sooner than expected.

Latin America Credit Markets Brief: May 26 – June 8

PRI scores a narrow victory in Mexico’s largest state – Brazil: JBS SA has the wind taken out of its sails – Argentina strikes new agreement with credit holdouts – Colombia’s Davivienda reveals big borrowing plans – Chile’s Codelco preps bond issuance – Peru, IFC mull US$2bn green bond issuance – Ecuador hits the international market – Venezuela moves to restructure debt with Russia – Uruguay preps return to the bond market – Bolivia sovereign rating outlook turns negative – Guatemala taps the international market

Mexico’s Economy Shakes off NAFTA Concerns

Mexico’s Central Bank upgraded its growth forecast for the country in 2017, the first big piece of good news since Donald Trump was elected in November 2016. The move suggests a tale of two growth stories in Latin America’s second largest economy.

It’s Time to Show Who We Are

Economists don’t have crystal balls. We construct scenarios and evaluate whether or not our premises are correct. An important premise adopted last year was that Michel Temer would have sufficient support in Congress and among the productive sector to carry out the necessary reorientation of the economic agenda. He would manage to fill out his term despite the risks because the judiciary would exert a stabilizing role in the passage to 2018. This premise has proved ephemeral.


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