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Two stories across the globe

If equity investors paid closer attention to what is going on in parts of the bond market they could avoid kneejerk reactions to what is essentially old news.

Confessions of a business travel diva

Mexico will issue its first 30-year peso-denominated bond in Q4, reflecting renewed confidence in the Mexican economy. Initially an auction of Ps1 billion ($92 million) is planned.

When asked what vexes him most in his dealings with investment bankers, Fabio Barbosa, CFO of Brazilian mining company Companhia Vale do Rio Doce (CVRD), takes a few moments to think. He is certainly in a good position to offer an opinion. His company’s $1 billion 2016 bond was the largest ever Brazilian corporate issuance in the global capital markets; it has been able to issue cheaper debt than the sovereign; it comes to market regularly and leverages its global reputation and investment-grade rating to achieve extremely aggressive pricing on its bonds.

Despite a downturn in emerging markets, Latin American companies are eager to tap the developing hybrid securities market to raise money to recapitalize their balance sheets without affecting their credit ratings or causing equity dilution.

Norway’s export credit agency, Eksportfinans, was the first issuer to take advantage of the Russian government’s decision to make the rouble fully convertible from July 1, selling a R1.5 billion ($558 million) rouble-linked Eurobond less than a week later.

Transelectrica is the country’s first utility to IPO.

G8 debt relief package will not constrain issuance plans.

Lebanon has announced plans to borrow as much as $7 billion by the end of this year as it struggles to reduce interest costs on its debt. According to Moody’s Investors Service, Lebanon’s gross debt had reached 727% of government revenue by the end of 2005, the highest level of any rated country.

By Zach Fuchs

The development of Latin America’s local capital markets continues apace following the first bond issue by a multilateral organization in Venezuela in 30 years. The bond, worth B215 billion ($100 million) and with a five-year maturity, was launched last month by CAF, the Andean development bank. It is the biggest non-government bond issued in Venezuela.