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Fears for quiet January in bonds

Jan 3, 2014

Market participants say bond sales could fall year on year this month — but US Federal Reserve action will be a decisive factor

Forecasts were mixed for cross-border debt issuance in January, after a quiet open to the year Thursday.

No Latin American borrowers have announced new cross-border bond transactions this year, and bankers and investors are looking to Monday for the cross-border bond markets to reopen in earnest.

Even there, market participants were split over the outlook: one said bonds would like return to a normal issuance pace and another said an "extremely busy" month was ahead. Others, though, said the week could start softly as borrowers test market conditions.

That echoed views in LatinFinance’s latest online poll, which asked readers how the pipeline for LatAm dollar bond sales this month would compare to the same period in 2013.

More than a third of respondents (35%) thought the bond sales would be lower this year than last, while the same proportion said supply would depend on actions by the US Federal Reserve. The poll was open December 16 to January 2.

Latin America’s local markets have not slowed down over the year-end, though. In Brazil, companies including Ouro Verde are preparing debenture sales, while Chileans Esval and La Araucana are doing the same. Mexican toll road Tenango-Itxapan de la Sal is planning a securitization. LF


LatinFinance’s latest poll asks readers whether Mexican or Brazilian companies will dominate in the equity markets in 2014

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