NEW YORK, Dec 7 (IFR) - Venezuela stole the limelight in
Latin America on Monday after partial results in the weekend's
election showed the opposition party with a handy win over the
ruling Socialists.
International bonds issued by both Venezuela and state-owned
oil company PDVSA jumped as much as four points in early trading
before retracing slightly.
Venezuela's 12.75% 2022s were ending the day at 51-52,
according to a Miami-based broker, while PDVSA's 6% 2024s were
spotted at 37-38.
"The jump of two to three points we are seeing does not
reflect the tectonic change happening in Venezuela," said Jorge
Piedrahita, chief executive of brokerage Torino Capital.
Activity in the region's primary markets meanwhile has
ground to a halt, with Argentina's Medanito seen as one of the
few borrowers who could still tap before year-end.
The oil and gas producer began meeting investors Monday for
a potential bond sale, but the company risks jumping the gun
after the election of a new reform-minded government.
Market-friendly president-elect Mauricio Macri could remove
price controls that have artificially propped up the domestic
oil sector and undertake other broad energy sector reforms.
And that could spell trouble for investors buying into the
offering from Medanito, which is expected to raise at least
US$150m with the bond sale in order to refinance existing debt.
Thanks to government price support, Medanito has been
selling crude at around US$75 per barrel, one portfolio manager
who met with company officials told IFR.
That is nearly double the market rate for West Texas
Intermediate, the US benchmark crude, which on Monday tumbled to
its lowest in nearly seven years.
"If the market is opening up and (international) oil is
getting into the system this price needs to come down," said the
portfolio manager.
"It won't happen overnight, but it makes me worried about
how (Medanito's) cashflow will be impacted."
PIPELINE
Argentina's EP company Medanito selected Itau and UBS to
take it on an international roadshow ahead of a possible capital
markets transaction.
The company will met fixed income investors in London on
Monday before heading to Switzerland on December 8 and New York
on December 9 and 10. Expected rating is CCC+ by Fitch.
Pemex (Baa1/BBB+/BBB+) mandated Barclays and HSBC for an
investor call that was scheduled for Wednesday.
Arcos Dorados, the largest McDonald's franchiser in South
America, has finished Swiss road shows via Credit Suisse. The
Argentina-based, NY-listed company is rated Ba3/NR/BB+.
Mexican white-goods manufacturer Controladora Mabe has
finished investor meetings through Barclays, Bank of America
Merrill Lynch, Citigroup and JP Morgan. Ratings are BB+/BB+.
Brazilian airline Gol (B3/B-/B-) has completed roadshows
with Morgan Stanley, Credit Suisse and Citigroup.
(Reporting by Davide Scigliuzzo; Editing by Marc Carnegie)