Brazil

Bond investors are betting that Brazilian steel producer Companhia Siderúrgica Nacional (CSN) can complete its comeback from the brink. Its bonds have rallied strongly enough for some holders to speculate a new issue may be on the cards.

A robust balance sheet did not protect Vale from returning to junk status with Moody’s this week as the Brazilian mining company’s bonds suffered the agency’s decision to punish the borrower.

Brazilian mining giant Vale’s bonds led losses in emerging markets on Wednesday after Moody’s became the first rating agency to put the notes on the junk pile in reaction to a tragic dam collapse.

Latin American bond bankers were left envying colleagues covering other markets as the region missed out on strong global credit conditions with a dead week for new issue activity.

Latin America's primary bond market has had its slowest start for nine years despite strong appetite for emerging market debt. This has presented an unexpected opportunity for issuers, and those from Brazil are best placed to take advantage.

Brazil’s first attempt to reduce the pension burden at the heart of its fiscal problem impressed analysts on Wednesday, though it did little to lift bond prices with many investors having already taken a bullish view on the prospects of reform.

Latin America's primary bond market has had its slowest start for nine years despite strong appetite for emerging market debt. This has presented an unexpected opportunity for issuers, and those from Brazil are best placed to take advantage.

Investors should beware the surge in Brazilian equities that coincided with the election of its new president Jair Bolsonaro last year.

BTG Pactual has appointed Brazil’s most recent finance minister to become CEO of its asset management business following the hire of a BlackRock veteran to lead its equities business.

BTG Pactual’s new tier two bonds, the only new issue from Latin America this week, traded pretty much in line with reoffer in the days following pricing, suggesting leads had done a reasonable job of price discovery.

Brazilian lender BTG Pactual was the sole Latin American borrower to venture into dollar markets this week as some syndicate bankers began to worry that the region’s issuers are missing the best of conditions.

Though a paucity of direct comparable bonds made it difficult to precisely judge the pricing on BTG Pactual’s tier two deal on Tuesday, DCM bankers said that the Brazilian lender had shown investors were willing to bet on high yield paper but keep discipline on price.