Buyers for Lat-Am bonds abound; Namibia, Peru plan roadshows; Ukraine restructuring approved

By Christine Van Dusen

Atlanta, Oct. 16 – Latin American bonds saw frenzied buying on Friday as easing from the European Central Bank, as well as the anticipated delay in a rate hike from the Federal Reserve, boosted appetite for risk.

Even Brazil-based Petroleo Brasileiro SA, which has been facing a corruption scandal that has pummeled its bonds, traded better on Friday, a New York-based trader said.

“Risky assets are closing the week on a strong note, supported by expectations of a delayed Fed lift-off and European Central Bank easing,” according to a report from Barclays Capital. “Monetary policy support has also helped EM assets.”

This came against the backdrop of pressure for the United States, which is seeing its “growth story stagnating,” a trader said.

Colombia’s Ecopetrol SA saw heavy demand on Friday and saw its prices rise, the New York trader said.

“There is still a lid on Brazil corporates, but the lid is a bit loose, so we are seeing bids creep higher,” he said.

High-grade bonds from Mexico climbed on Friday, in part due to a lack of paper, he said.

“There are no sellers – something that was not the case Tuesday and Wednesday,” he said.

In deal-related news, Namibia was preparing for a roadshow, set to depart on Oct. 19. The sovereign is marketing a dollar-denominated issue of notes.

Barclays Capital, JPMorgan and Standard Bank are the bookrunners for the Rule 144A and Regulation S deal.

Peru sets roadshow

Peru will set out on Oct. 20 for a series of investor meetings in Europe, a market source said.

The meetings will include an update on the sovereign’s finance program and a discussion of recent developments in the Peruvian economy.

A new issue of notes could follow, depending on market conditions.

BBVA, BNP Paribas and JPMorgan are leading the roadshow.

Ukraine in focus

Taking a look at Ukraine, the Ministry of Finance this week announced that the restructuring of its sovereign and sovereign-guaranteed bonds – except for the $3 billion 5% 2015s owned by Russia – was approved by bondholders.

“Bonds are subject to a 20% haircut, a maturity extension for an increased coupon and GDP warrants,” a trader said. “Russia didn’t take part in the voting and Ukraine has stated that it is ready to go to court in case no agreement is reached.”

New bonds are expected to be issued next month, said Fyodor Bagnenko, a fixed-income trader with Dragon Capital.

“Meanwhile, corporates remained quite busy,” he said.

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