- For the month of March, we estimate that LatAm sovereign hard-currency bond obligations amount to c.USD1bn, scattered across different countries and dates (see page 3 for the list of covered countries).
- Mexico (USD292mn), Colombia (USD183mn) and Peru (USD141mn) have the largest bond payment obligations, but most payments are relatively small with only a handful of interest payments over USD50mn. Therefore we do not foresee significant bond demand when the coupons get paid.
- We estimate that bond obligations in the rest of 2022 amount to USD12.1bn, of which 79.5% is coupon payments and 20.5% is principal payments. For the remainder of 1H22 (April-Jun) the average monthly bond obligations amount to c.USD750mn, while in 2H they amount to c.USD1.5bn/month with an uptick in July (USD2.3bn).
- Short-term annual bond obligations look fairly healthy across the countries. We expect annual bond service obligations to average USD16.3bn in 2022-25, then increase to USD28.9bn in the subsequent three years (2026-27) due to higher bond principal payments in those years as well as many LatAm countries actively rolling over short-dated bond maturities for longer-maturity bonds.
- In the short term, the bond obligation profile for the LatAm countries under our coverage seems fairly healthy, in our view. Furthermore, we believe their ready access to capital markets and other sources of financing makes a distressed situation highly unlikely which favours the carry trade with short dated bonds.