LatAm bond sales surge to record
Citi, HSBC lead league tables as debt capital markets activity swells in the first half of 2014
New issues from Latin America reached their
greatest volume on record in the first half, according to data
Latin American issuers sold $102.2bn of bonds in
local and international markets between January and June, some
23% higher than the same period in 2013, the data shows.
The surge comes as borrowers take advantage of low
borrowing costs — as quantitative easing continues
from global central banks — to sell new bonds and
refinance outstanding debt with liability management
Sovereigns Ecuador and Jamaica, which both recently restructured their
debt, have caught particular attention with large bond
The region’s international bond sales
also reached a half-year record in the first six months of 2014
to reach $85.5bn, beating the previous record established in
the second half of 2013 by nearly $20bn.
At $631m, the average deal size was also the
highest on record, Dealogic said.
Citi led the LatAm bond league tables with a 10.9%
market share, while HSBC came on top for cross-border deals,
with an 11.6% market share, the Dealogic data showed.
Katia Bouazza, HSBC’s co-head of
global capital markets for the Americas, said the market had
been unexpectedly busy in recent weeks, despite expectations of
a decrease during the soccer World Cup. The market may take a
breather during the summer, she said.
"It may slow down because we had weeks when we had,
four, five, six deals at a time," she told LatinFinance.
However, strong demand for recent deals, including
Codelco’s €600m euro debut last
week, show that bond deals will continue, she said.
Strong liquidity and a search for yield among
investors in recent weeks has allowed DCM bankers to squeeze in
prices well below guidance, and companies to borrow more than
Deals paid an average spread of 243bp over the
benchmark in the first half of the year. That was down 64bp
from the second half of 2013, is the lowest since the last six
months of 2007, when it recorded 194bp, Dealogic said. LF