The huge volatility witnessed in US and Japanese capital markets that erupted on August 2 is preventing Latin American issuers from accessing the international debt capital markets (DCM), but bankers do not expect any lingering problems as corporates eye the traditional September-October deal window.
“We’ve been marketing Oceânica [Engenharia] since last week and we had planned to announce IPTs [initial price thoughts] on Wednesday [August 7] but we’ve had to push that back,” says a banker involved in the deal. “Investors are still a little wary – it’s still so close to the downdraft we saw on Monday [August 5] and so investors aren’t ready to jump into a single-b/ B2 name.”
The banker had started marketing a five-year, NC2 deal the week before the recent volatility and had been confident of a successful execution. Oceânica had previously been planning to IPO in Brazil but local capital market volatility – caused by fears of fiscal deterioration – have closed the IPO market until 2025, according to bankers, which had led Oceânica to seek debt funding, of between $300 million and $400 million, in the international markets.
The banker points to July’s $400 million deal for Omni Helicopters International (OHI) as proof of a risk-on market in the region in recent months.
