Brazil

Corruption accusations made overnight on Wednesday against Brazilian president Michel Temer threw EM bond markets into turmoil just as they had already suffered a torrid day on the back of a Donald Trump-provoked slump in global markets.

What, on Wednesday, seemed to be primary capital markets gung-ho for any deal imaginable by Thursday looked more like a market on the skids as concerns intensified over the endless controversies dogging US president Donald Trump’s administration.

Latin America bonds did not emerge unscathed from the carnage in broader markets on Wednesday as several weeks of strong appetite for EM bonds were interrupted by the biggest US stock sell-off in eight months.

Emerging markets bond bankers can think of nothing to derail the ongoing bull-run and while this might point to hubris, this week’s trades have given no indication of fatigue.

Bond investors in Latin America appear happier to be stretched by tight pricing than hairy credit quality after Brazilian state oil giant Petrobras pulled off an exceptionally tight bond return on Monday.

Brazilian electricity company Cemig will return to bond markets towards the end of the month. It had failed to garner sufficient investor interest before its earnings numbers went stale.

Recent developments in Latin American new issue markets may have shown just how risk-tolerant the market has become, but there are signs that investors may be fighting back.

Brazilian government-owned development bank BNDES sold a long-awaited green bond on Tuesday, with a combination of scarcity value and SRI investor support ensuring tight pricing.

Brazilian government-owned development bank BNDES sold a long-awaited green bond on Tuesday, achieving tight pricing that bankers put down more to a lack of supply from Brazil’s quasi-sovereign issuers than the green aspect of the deal.

Bond investors revelled in the extra eighth of a point in yield they earned on Friday after the threat of a workers’ strike at one of Votorantim Metais’ smelters led the company to delay pricing its debut bond and hike pricing.

Brazilian development bank BNDES surprised some bond market bankers by opting not to issue its first ever green bond the day after its roadshow ended. But conditions appear ripe for the deal when it does arrive.

Santander’s Brazilian operations were behind a 14% increase in the group’s attributable profit for the first quarter, with the UK arm also rebounding from a weaker 2016.