LatAm Weekly — Issuers flock to market post-Labor Day

9fin team

5 September 2025•10 min read

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As anticipated, the LatAm primary market came roaring back after the US Labor Day holiday, ending a short late-summer lull. Brazilian and Chilean names took advantage of the recent decline in US yields and, in some cases, strong financial results. Investors were eager to snap up long-dated high yield bonds, and LatAm issuers raised $7.65bn.

The Brazil sovereign launched a $1bn 7.5% 30-year note and reopened a five-year benchmark, raising $750m with a 5.20% yield. This was first time since 2014 that the country conducted more than two international bond sales in the same year. An increase in the fiscal deficit, expectations of slowing growth, and Trump’s tariffs didn’t deter investors. The issuance opened the market for Brazilian corporate issuers, and Petrobras followed with a $2bn dual tranche: $1bn 5.125% due 2030, and $1bn 6.25% due 2036.

Rede D’Or Sao Luiz also came to market with a benchmark-sized 6.45% bond, capitalizing on improved credit metrics. The healthcare company should reap the benefits of increased cash flow from recent investments and lower its leverage.

Pulp and paper companies were active this week: Brazilian Suzano placed a 10-year note to fund a tender offer of its $517m bond due 2026 and its $700m notes due 2027, raising $1bn at 5.50%. The issuance was 5x oversubscribed, thanks to the company’s profitability despite pulp price pressure. Chilean pulp and paper CMPC Investments placed a sustainable hybrid $600m bond at 6.75%. The deal tightened from the initial 7% IPT area, given strong investor demand (4x oversubscribed). The new hybrid deal, with a 32-year tenor and a seven-year non-call period, qualifies for equity-credit treatment, supporting 3.65x leverage metrics while pushing debt maturities to 2057.

Kallpa the Peruvian electricity generator, placed a $700m 10-year bond at 5.50%, a very tight spread over the Peruvian sovereign. Proceeds will be used to rollover the 2027s and to finance a solar project. Antofagasta the Chilean copper miner, placed a $600m investment grade bond at 5.67% YTM, to finance its ambitious $9.4bn growth plan.

Investment grade Chilean power generator Colbun issued a $500m 5.375% 10-year bond, as it tries to optimize its capital structure in its current capital-intensive expansion. EBITDA dropped 8% year-over-year in Q2 25 due in part to lower spot market activity, and the company’s renewable assets are still under construction. Net leverage increased to 3.24x — partly because of delayed monetization from its projects under construction — which will likely be closely monitored by rating agencies.

Not everyone south of the border was ready to refinance or issue just yet, though. Brazilian Oi said it wanted to amend its judicial restructuring (RJ) to shore up liquidity and will ask for approval to retain up to $110m from real-estate assets sales. The telco is trying to drop its Chapter 15 in the US — to consider filing a Chapter 11 — under the argument that its RJ in Brazil is done, and this amendment doesn’t support this reasoning.

Brazilian regulator CADE asked Azul and Gol to submit their codeshare agreement for review to better understand the overlap of the two airlines’ networks and the possibility of any merger-like effects it may have. The two carriers were barred from extending the agreement to additional routes until the agreement is reviewed. The companies signed a non-binding merger agreement in early 2025, but that’s on hold until there is a definitive outcome from Azul’s ongoing Chapter 11 proceedings.

Raízen and Femsa announced the dissolution of its JV, Grupo Nós, a non-cash transaction that needs to be authorized by regulators. Raízen will keep 1,265 Shell Select and Shell Cafes, while Femsa will keep 603 Oxxo Brazil stores, a distribution center in Sao Paulo, and the JV’s cash and debt. It’s likely Raízen lacked either the appetite or the capital to match Femsa’s expansion pace, according to 9fin sources.

Mexican state-owned Pemex announced a tender to repurchase $9.9bn in bonds due 2026-2028, which boosted its bond prices. The tender is likely funded via the governments’ pre-capitalized 5.50% securities due 2030 that were issued last month. Government support is a good sign, but Pemex still faces a multitude of issues such as delays in JVs and pressure from suppliers over $26bn in payables.

Argentina’s IRSA Inversiones reported a return to profit in FY25, driven by strong retail sales and high office occupancy, with net leverage easing to 1.25x. Solid capitalization and liquidity support outlook, though macro risks remain. Meanwhile, Argentine banks are adjusting to disinflation and high real rates, but rising NPLs — especially in consumer loans — are pressuring asset quality. Banco Galicia’s Q2 25 profit fell 76%, while Banco Macro benefited from strong loan growth and wider margins. Capital buffers eroded slightly YoY, and rising NPLs — 4.4% at Galicia and 2.06% at Macro — remain the key pressure point heading into H2 25, as higher local rates bite.

Source: 9fin

Preparing to go to market:

Caja de Compensación Los Andes, Chile's largest private non-profit social security institution and payroll loan lender, is currently gauging investor interest for a short-maturity CHF-denominated social bond in cross-border markets. Deutsche Bank and UBS are serving as joint lead arrangers for this offering.

Metro de Santiago is marketing a new green CHF medium-term bond to fund network expansion and sustainable projects. Its outstanding bonds trade near Chile’s sovereign, and equalized ratings highlight expectations of extraordinary state support to safeguard operations.

Buenos Aires City is preparing a potential $600m international bond issue, structured as up to $400m in new debt plus an exchange for retail holders. Proceeds would focus on refinancing, including a $300m maturity due in June 2026. Officials are considering a five- to seven-year tenor, with the deal expected to fall within the narrow window between Buenos Aires Province’s elections this weekend and the national congressional vote in October. Market appetite will depend heavily on political outcomes and the performance of President Javier Milei’s party, as investors gauge stability ahead of national elections.

Separately, Santa Fe Province is monitoring the right timing for an up to $800m five-year deal, adding to regional refinancing activity as yields continue to climb. With yields lower than at the end of July and spreads tighter, conditions remain conducive for EM issuers, especially with potential risk-off drivers ahead.