Brazil

Brazilian lender Itaú raised $750m of tier two notes on Wednesday, its first ever issue of Basel III-compliant tier two bonds in the international market.

Brazilian steel producer Gerdau could return to the international bond market this week for the first time in over two years, looking to take advantage of strong performance in its bonds and positive sentiment surrounding Brazil.

As of Thursday afternoon, pricing on a duo of Brazilian high yield credits looked set to be pushed to Friday, as investors in Latin American bonds were given the rare chance to get stuck into some riskier names.

Bankers said that Itaú Unibanco’s proposed tier two dollar deal was “exactly the kind of paper people want to buy” as the Brazilian lender lined up investor meetings in the wake of the Brazilian sovereign’s successful first ever dual tranche dollar deal.

Open interest in CME Group’s BRL/USD futures rose in the run up to the Brazilian Central Bank’s 50bp benchmark interest rate cut and has remained elevated ever since.

Brazil completed a tender offer for seven different dollar bonds on Tuesday, buying back for cash small amounts of bonds maturing between 2027 and 2041 but mostly guiding bondholders into its new long 30 year issued on Monday.

Strong technicals continue to drive international bond markets in Latin America as Brazil on Monday became the latest sovereign to take advantage of low rates and push out debt maturities with a 'blowout' dual tranche deal.

The only two corporate issuers from Latin America this week sailed through primary markets as bankers said low rates and technical factors would continue to override socio-political volatility and sluggish economies in the region.

After bankers said Braskem’s blow-out bond issue this week was a vote of confidence for Brazil’s economic turnaround, a small single-B rated bank and an infrastructure company that underwent a restructuring just a year ago a set out to provide a tougher test of demand.

Emerging market issuers continued to enjoy solid market conditions this week with new mandates joining the pipeline and Abu Dhabi’s Mamoura executing a $3.5bn triple tranche trade.

Brazilian petrochemicals firm Braskem clinched a $2.25bn dual tranche bond issue on Tuesday with bankers close to the deal claiming a negative new issue concession after US corporate buyers helped build a strong book.

Private Brazilian lender Banco Original will look to enter international bond markets with a $200m senior unsecured issue, according to rating agency reports.