Balance Preliminar de las Economías de América Latina y el Caribe 2017

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42 Chapter III Economic Commission for Latin America and the Caribbean (ECLAC) External bonds issued by Latin American and Caribbean countries grew by almost 9% in the first 10 months of 2017 compared with the year-earlier period and posted record volumes since the data series began Bond issues in international markets by the countries of the region continued to grow, and were up by almost 9% in the first 10 months of 2017 (compared with the year-earlier period). This is the result of a stronger appetite for emerging market assets and more favourable economic conditions in the region. Moreover, for the period from January to October 2017, total bond issues amounted to roughly US$ 127 billion, a record since the data series began (see figure III.8). The banking and private corporate sectors posted the strongest increases in bond issues over the period, while those of the other sectors fell year-on-year. 7 Figure III.8 Latin America and the Caribbean: bonds issued in international markets in the first 10 months of each year, 2006-2017 (Millions of dollars) 140 000 120 000 100 000 80 000 60 000 40 000 20 000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Supranational Sovereign Quasi-sovereign Private Bank Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of figures from the Latin Finance Bonds Database. The largest increases between January and October in 2017 were posted by Chile and Peru, where, despite weaker economic performances, sovereign risk levels remained low and demand for these countries’ bonds on international markets was solid (see figure III.9). By contrast, bonds issued by Argentina and Mexico recorded the strongest declines compared with 2016, although in both cases this performance stemmed from a particularly demanding comparison base in 2016. For Argentina, 2016 was the year the country returned to the bond markets after reaching an agreement with holdout creditors, which resulted in record bond issues during the first half of the year. In Mexico, bond issues by PEMEX were exceptionally high in 2016, as the State-owned oil company sought to pre-finance its needs for 2017 ahead of presidential elections in the United States. 8 7 The quasi-sovereign sector includes public sector development banks and State-owned enterprises, among other entities. The supranational sector includes regional development banks, such as the Development Bank of Latin America (CAF) and the Central American Bank for Economic Integration (CABEI). 8 See PEMEX, “Pemex coloca el bono en euros más grande en la historia de los mercados emergentes”[online, in Spanish] http:// www.pemex.com/saladeprensa/boletines_nacionales/Paginas/2017-011-nacional.aspx and El Economista, “Emisión de deuda del sector público rompe récord en el 2016” [online, in Spanish] https://www.eleconomista.com.mx/economia/Emision-dedeuda-del-sector-publico-rompe-record-en-el-2016-20170228-0071.html.
Preliminary Overview of the Economies of Latin America and the Caribbean • 2017 Chapter III 43 In 2017, sovereign risk levels in the region maintained the downward trend that began in February 2016 Sovereign risk levels in almost all the countries of the region have been declining since early 2016, in line with calmer global financial markets and greater financing volumes in the region’s bond markets. Between 1 January and 31 October 2017, the Emerging Market Bond Index Global (EMBIG), which reflects regional sovereign risk, fell by 70 basis points to 403 basis points (see figure III.10). The notable exception to this trend was the Bolivarian Republic of Venezuela, where risk levels stood at 3,171 basis points at the end of October, and even shot up to more than 5,000 basis points following the Government’s announcement that it would be restructuring its debt and the country’s failure to meet interest payment deadlines, which resulted in a downgrade to selective default by credit rating agencies. Figure III.9 Latin America (15 countries): debt issuance in international markets, January-October 2016 and 2017 (Millions of dollars) 40 000 35 000 30 000 25 000 20 000 15 000 10 000 5 000 0 Argentina Bolivia (Plur. State of) Brazil Chile Colombia Costa Rica Dominican Rep. Ecuador El Salvador Guatemala Honduras Mexico Panama Paraguay Peru Supranational Year-to-date 2016 Year-to-date 2017 Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of figures from the Latin Finance Bonds Database. Figure III.10 Latin America (13 countries): sovereign risk according to the Emerging Markets Bond Index Global (EMBIG), January 2012-October 2017 (Basis points) 700 650 600 550 500 450 400 350 300 31 Jan 30 Apr 31 Jul 31 Oct 31 Jan 30 Apr 31 Jul 31 Oct 31 Jan 30 Apr 31 Jul 31 Oct 31 Jan 30 Apr 31 Jul 31 Oct 31 Jan 30 Apr 31 Jul 31 Oct 31 Jan 30 Apr 31 Jul 31 Oct 2012 2013 2014 2015 2016 2017 -70 basis points Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of figures from JP Morgan. EMBIG level at: 31 December 2015 31 December 2016 Argentina 438 455 361 Bolivia (Plurinational State of) 250 83 204 Brazil 548 330 237 Chile 253 158 118 Colombia 317 225 183 Dominican Republic 421 407 278 Ecuador 1 266 647 563 Mexico 315 296 247 Panama 214 187 124 Paraguay 338 281 196 Peru 240 170 136 Uruguay 280 244 154 Venezuela (Bolivarian 31 October 2017 Republic of) 2 807 2 168 3 171 Latin America 605 473 403
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Balance Preliminar de las Economías de América Latina y el Caribe 2017

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