LatinFinance - March/April 2015 - 27

sovereign on top of its game when it comes
to spotting and seizing opportunities.
That came in spite of a difficult year for
the country. One of the most contested
electoral races in its history spurred
volatility in the domestic financial market
and beyond. Yet the debt management
office, led by Paulo Valle, was active in the
euro and dollar markets. It also executed a
liability management exercise to buy back
seven old bonds, while pricing a new 5%
2044 bond yielding 5.131% - the lowest yield
ever for a Brazilian 30-year bond.
The transaction followed a drop of
10 basis points in 30-year US Treasury
rates and a rally in Brazil's 2041 credit
spreads. That underscored the sovereign's
reputation for timing its deals with
panache.
"They always get their timing right," said
one observer.
Colombia, which follows in third place
on the Scorecard, paid two visits to the
cross-border market in 2014. It joined a
trend for borrowers to go long in January,
selling a $2 billion 30-year bond to yield
5.647% after seeing a narrow curve pick-up
for the maturity extension.
The public credit office led by Michel
Janna raised $1 billion in a dual-tranche

New entrants
Public credit scorecard 2015
Country

Officer

1.

Mexico

Alejandro Díaz de León

2.

Brazil

Paulo Valle

3.

Colombia

Michel Janna

4.

Peru

Carlos Linares

5.

Ecuador

William Vásconez

transaction in October to prefund its 2015
budget, taking advantage of a drop in US
interest rates and strong appetite for the
credit.
Colombia's efforts to raise funds also
included a swap of 6 trillion pesos ($2.9
billion) in local currency bonds into paper
with the same face value, but longer
maturities. The transaction saved Colombia
2.6 trillion pesos in principal payments due
in 2015, Janna told LatinFinance late last
year.
Observers also praised the sovereign
for handling an influx of foreign buyers
adeptly. JPMorgan increased the weighting
of Colombia's local currency bonds in
its investment indices, encouraging
international investors to expand their
holdings of the paper.

Rare deals
Several sovereigns were upgraded last
year, including Bolivia, Mexico, Colombia,
Ecuador, Paraguay and Uruguay. Peru,
however, was lifted two notches to A3
by Moody's in July. The sovereign, a rare
borrower in the international markets,
came back to the cross-border arena in
October, with an exercise aimed mainly
at buying bonds with short maturities and
high coupons.
The sovereign bought back or
exchanged 5.34 billion soles ($1.86 billion)
worth of five instruments denominated in
local currency and dollars at the same time
as it raised 7.41 billion soles with the sale of
a 2024 global-local bond. The transaction
was especially significant because the A3/
BBB+/BBB+ rated sovereign had been away
from the market since January 2012.
Ecuador, meanwhile, staged an
impressive return to the cross-border
market after a much longer absence.
The sovereign sold a $2 billion 10-year
bond yielding just below 8% - a price
described by many observers as a huge
achievement, given that the country
defaulted on its debt six years earlier.
Upgrades followed, and the sovereign is
now rated B3/B+/B. LF

March/April 2015 - L ATINFINA NCE.COM 27
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LatinFinance - March/April 2015

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