Century Bonds: From one extreme to the other

Two years ago in the wake of the Mexican peso crisis, Latin American issuers were unable to raise even short-term debt. Now a Chilean credit has launched the continent’s first 100-year bond obtaining the tightest pricing for an emerging market issuer in this niche area. Strong demand for the bonds of electricity generator Endesa pushed up the size of last month’s issue from $170 million to $200 million.

But while the Endesa century does provide proof of South America’s improving fundamentals, analysts say this and other emerging market centuries were driven more by issuer concerns about image and US investor thirst for blue-chip credits offering above average yields.