Brazil

Petrobras’s latest new issues gradually recovered ground in secondary markets this week as the overhang effect from a huge exchange offer began to wear off.

Both of Brazilian oil giant Petrobras’s new bonds issued last Monday will jump to jumbo size after the response to the company’s exchange offer surpassed the expectations of many market participants.

Brazilian water and sewage company Aegea Saneamento e Participações is looking to raise $400m via its debut international bond issuance, according to rating agency reports.

Brazilian oil giant Petrobras appeared to have timed its return to bond markets to perfection on Monday, but an underwhelming secondary market performance left some investors disappointed.

Brazilian state oil giant Petrobras returned to bond markets on Monday with a liability management driven trade that bankers say should hit $6bn at least once a concurrent exchange offer is completed. But the deal traded down in the grey market — to the surprise of many.

More than 65% of the holders of Brazilian mining giant Vale’s 4.625% 2020s agreed to sell their bonds before last week’s early-bird tender deadline.

Klabin became the third Brazil pulp and paper producer to sell green bonds on Tuesday, squeezing pricing more than 40bp from initial price thoughts.

The Brazilian Monetary Authority (CMN) has published a covered bond regulatory framework which paves the way for the country’s five largest lenders to press ahead with deals. Though the move is credit positive for banks, they are unlikely to issue in euros in the near term.

Pulp and paper producer Suzano Papel e Celulose reopened its 10 and 30 year bonds to the tune of $400m in total on Tuesday, becoming the first Lat Am issuer out of the blocks in September and the first of three pulp and paper companies from Brazil likely to issue this month.

At least eight Latin American corporates are meeting fixed income investors ahead of potential dollar trades next week, with Brazilian credits in particular apparently keen to make up for lost time.

As its peer Suzano sold $400m of 10 and 30 year bonds on Tuesday, Brazilian pulp producer Klabin announced plans for its first international bond deal in over four years.

Pulp and paper producer Suzano Papel e Celulose reopened its 10 and 30 year bonds to the tune of $400m in total on Tuesday, sneaking into the market with a drive-by trade ahead of a long line of Latin America issuers that are meeting investors this week.