Mexico

Some EM investors are starting to see value in bonds issued by troubled Mexican state oil company Pemex, while further potential support from the government could lift the bonds further.

Cement company Cemex brought hope for the Mexican bond pipeline as it turned to Europe to become the first Mexican credit to issue internationally since January, while the sovereign also crossed the Atlantic for investor meetings this week.

Cement company Cemex became the first Mexican credit to issue internationally since January as it tapped European investors for a new seven that it will use to refinance existing debt.

Cemex is back in the bond market after a year and a half’s absence, opening books on a senior secured bond in euros.

There was more bad news for Mexico’s standing in bond markets last Friday evening as S&P shocked many market participants by slapping a negative outlook on the sovereign’s BBB+ rating.

Bonds issued by Mexican state oil company Pemex have had a torrid week after support measures announced by the government did not reassure markets.

Pemex's bonds were again the most under-performing in Latin America markets on Tuesday as investors continue to punish the company for last Friday’s apparently underwhelming government support package.

Pemex bond prices slid further on Friday after analysts said Mexican president Andrés Manuel López Obrador’s measures to support the state oil giant would not be enough to prevent continued deterioration in its credit quality.

Brazilian lender BTG Pactual will hit the road next week as it looks to capitalise on improving investor sentiment around Brazil, in order to issue a 10 year non-call five Basel III compliant tier two note.

Bonds from two of the most important issuers in Latin America sank this week as they neared fallen angel status, but some investors said that there was a danger of overshooting.

Despite some investors saying it had been clear for some time that Pemex was on a gradual decline towards junk status, a two notch rating downgrade from Fitch appeared to catch bondholders unaware as the Mexican state oil giant’s debt slumped in secondary markets.

Mexican non-bank lender Crédito Real has cancelled a tender offer and will now issue a smaller bond than initially planned, owing to market concerns regarding potential government policy, GlobalCapital understands.