Oil Sector leads DCM to expected busy September

Oil Sector leads DCM to expected busy September

With the June and July US Treasury market hysteria behind, Latin American issuers are prepared to take advantage of relative calm to raise funds. Two in the oil and gas sector have already announced plans.

Colombia’s Ecopetrol will meet investors during the first week of September ahead of what could be the state-controlled firm’s second-ever international bond issuance. The deal would follow a blockbuster domestic market sale.

Mexico’s Grupo R is poised to capture increasing interest in Mexico’s energy sector. With laws being discussed to give state-owned Pemex more flexibility, market watchers sniff opportunity to use the bond market to the extent that Petrobras contractors have in Brazil. Offshore Drilling Holdings, Grupo R’s parent, is meeting investors ahead of a likely $955m bond.

Like Ecopetrol, Chile’s Embotelladoras Andina is targeting both domestic and cross-border funds to help replace acquisition debt. It could be joined by any of several issuers who decided to wait earlier in the year, including fellow Chileans Telefónica Móviles Chile and  Colbun. The City of Lima was another meeting investors in August and who is likely to return. 

Brazilian bank Caixa is looking to return to the DCM. Guatemala’s Cementos Progresso is a candidate to make its cross-border debut.

On the sovereign side, Barbados has indicated interest in raising $250 million.

Despite a closing of the cross-border markets earlier this year when widening treasury levels spooked issuers, volume is up in 2013. LatAm issuers have sold $99.2 billion from 268 transactions through August 29, according to Dealogic, when both domestic and cross-border issuance is considered. This compares to $97.9 billion from 261 deals in the corresponding period in 2012. LF