June 11, 2014
Bond investors are rushing for increasingly lower-rated deals from Latin America
A surge of demand from fixed-income investors is drawing increasing numbers of Latin American companies and sovereigns to the bond market.
High grade borrowers including América Móvil and the Republic of Uruguay, and sub-investment grade issuers like Marfrig, have rushed to market amid conducive conditions.
A further liquidity push by the European Central Bank announced last week, as well as a bid by issuers to secure funding before a summer slow-down, are said to be among the drivers.
Spreads on emerging market credits tightened last week after the ECB announced a new liquidity program and US employment data was reported stable, Siobhan Morden, head of Latin America strategy at Jefferies, said in a research note on Monday. She also pointed to record inflows into EM bond funds.
“The strong inflows and only moderate debt issuance dominates over tight valuations,” wrote Morden. “The country specific risk