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LATAM WRAP-Greek vote, commodity concerns keep lid on LatAm
July 14, 2015 / 6:43 PM / 2 years ago

LATAM WRAP-Greek vote, commodity concerns keep lid on LatAm

NEW YORK, July 14 (IFR) - Stronger US markets did little on Tuesday to inspire LatAm investors fretting about commodity prices and awaiting more certainty over Greece’s latest bailout package.

Accounts are also reluctant to put money to work ahead of Federal Reserve Chairwoman Janet Yellen’s Congressional testimony later this week.

While crude prices staged a comeback this afternoon following an initial drop due to the nuclear deal with Iran, concerns about how slower Chinese growth will impact the commodity exporting LatAm region has given investors pause.

“No one seems that confident about being long in this market, despite real money having cash,” said a New York-based trader.

Bankers don’t discount a possible drive-by deal this week, but for the most part they see borrowers waiting for more clarity on Greece before pulling the trigger.

That said, issuers are likely to move forward - though with higher new issue concessions - before the window closes in late summer and ahead of a possible US rate hike in September.

“The market has been undersupplied, and borrowers feel rate hikes will come post-summer, so if you have a window you should take advantage of it,” one syndicate official told IFR.

In the secondary markets, bonds issued by Brazilian steelmaker CSN remained near this week’s highs following news that it was looking to sell assets in an effort to reduce debt.

CSN’s 2020s were being quoted at 84.25-85.00 on Tuesday, marking a good four point jump from Friday’s levels.

“This is good news for the company,” said Klaus Spielkamp, head of fixed-income sales at Bulltick.

“And at 85 it still pays a yield of 10.40%. You don’t see that very often in this market, though (poor) expectations for Brazilian economic growth (don‘t) help CSN in the short term.”

Fitch downgraded CSN last month to BB from BB+, citing a combination of high capex, weak demand for steel in Brazil and a sharp decline in iron ore prices.

At the time, Fitch calculated CSN’s net leverage over the 12 months ended in March to be 5.8x, up from 4.7x in the previous year.

PIPELINE

America Movil (A2/A-/A) and Telesites (expected NR/BBB-/BBB-) have wrapped up investor meetings via Citigroup, Inbursa, BBVA and Santander.

The meetings were intended to discuss the new Operadora de Sites Mexicanos business and gauge interest for 144A/Reg S deals in Mexican pesos and/or USD.

Banco Santander Chile (Aa3/A/A+) has wrapped up meetings via Deutsche Bank and Santander to discuss opportunities in the domestic Chilean markets.

Jamaica, rated Caa2/B/B-, has wrapped up investor meetings via Citigroup. The meetings were described as a non-deal roadshow, but markets have been expecting the sovereign to raise funding to retire a PetroCaribe loan owed to Venezuela. (Reporting by Paul Kilby; Editing by Marc Carnegie)

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