Brazil

Though Latin America bond markets have so far dodged the brunt of global volatility related to Covid-19, the official name of the coronavirus outbreak, the region’s commodity dependence makes it particularly vulnerable to a China slowdown, say analysts.

Brazilian hospital operator Rede D’Or became the third Latin American company in a week to tap recently issued bonds as the region’s fixed income markets continue to defy coronavirus-related volatility elsewhere.

Latin American bond markets reached record levels of January issuance this week as primary activity ticked over despite the scare about the coronavirus, which the World Health Organisation declared a global emergency on Thursday.

Three Latin American companies issued bonds on Thursday and three more are meeting investors, as borrowers of all shapes and sizes assess the appetite for their debt.

Two long-established, but long-absent, Brazilian issuers have turned to international bond markets as US dollar bonds become a more competitive option for the country’s issuers.

Banco Bradesco returned to international bond markets on Wednesday after an extended absence, and fellow Brazilian Eletrobras is also plotting a cross-border deal as US bond markets finally begin to look attractive for Brazilian issuers.

Brazilian steel producer Companhia Siderúrgica Nacional (CSN) will continue its focus on addressing short-term debt maturities with a proposed benchmark that it wants to use to fund a tender for bonds maturing in July.

Issuers from Latin America’s largest economy finally began feeding a yield-hungry buy-side this week, as bankers say there is little sign of investors turning their noses up at apparently rich valuations.

Brazilian media group and broadcast TV company Globo Comunicação e Participações will likely price a new 10 year bond on Thursday after setting initial price thoughts on Wednesday.

Latin America’s rip-roaring start to the year took a slide down the credit curve on Tuesday with two high yield deals — to no discernible impact on investor appetite.

Brazilian meatpacker Marfrig said last week that it would redeem $446m of bonds issued three years ago, to improve its debt profile.

Big European investment banks pivoted towards the Americas during 2019 in an attempt to boost revenues and position themselves for the next downturn, writes David Rothnie. With large M&A across the industry still off the table, banks are finding scale through joint ventures and alliances.