Panama to Pacific Rubiales Selling Debt Before Fed MeetingChristine Jenkins
Panama’s government and Colombian oil producer Pacific Rubiales Energy Corp. are among four Latin American issuers selling bonds amid speculation the U.S. Federal Reserve is moving closer to raising interest rates.
Panama sold $1.25 billion in global bonds, its biggest sale in four years, while Bogota-based Pacific Rubiales is planning a $750 million bond sale, according to people familiar with the matter who asked not to be identified because the information is private. Peru’s BBVA Banco Continental sold $300 million of notes today, while Chilean lender Corpbanca may raise at least $500 million as early as tomorrow.
The rush to market comes ahead of a two-day meeting at which the Federal Reserve may decide no longer to use the phrase “considerable time” in its guidance about how long before it raises interest rates. Near-zero benchmark rates in the U.S. and Europe have bolstered demand for higher-yielding debt from emerging-market issuers.
“With expectations for a change in the statement, they’re jumping on the bus that’s seeing rates go higher,” Cesar Sanchez, vice president of fixed-income sales at Ultralat Capital Markets, said in e-mailed response to questions.
While borrowing costs for companies in emerging markets rose 11 basis points last week to 5.19 percent, they’re still near this year’s low of 5.03 percent reached July 11, according to according to data from JPMorgan Chase & Co.
Panama sold 10-year dollar bonds as the country builds an extension of the subway system and is expected to complete a $5.25 billion expansion of the Panama Canal by the end of next year. The Central American nation sold the notes to yield 1.5 percentage points more than U.S. Treasuries, according to data compiled by Bloomberg.