Senior Credit Analyst - Emerging Markets, EM Spreads

Leandro Gubler

Senior Credit Analyst - Emerging Markets

EM Spreads

Credit

<ul>
<li>We maintain Overweight on the 2031s and 2032s for their attractive carry, meaningful spread pickup versus LatAm BB peers, and stronger downside protection at current discounted prices.</li>
<li>We think credit metrics will remain stable, supported by strong liquidity covering maturities through 2027, easier-to-roll bank debt, and expected EBITDA improvement from recovering steel and resilient mining.</li>
<li>We see potential spread compression from recovering steel prices, protectionist measures, asset-sale-driven deleveraging, and solid operating assets, reinforcing the bonds’ attractive relative value at current wide levels.</li>
</ul>


We maintain Overweight on the 2031s and 2032s for their attractive carry, meaningful spread pickup versus LatAm BB peers, and stronger downside protection at current discounted prices.
We think credit metrics will remain stable, supported by strong liquidity covering maturities through 2027, easier-to-roll bank debt, and expected EBITDA improvement from recovering steel and resilient mining.
We see potential spread compression from recovering steel prices, protectionist measures, asset-sale-driven deleveraging, and solid operating assets, reinforcing the bonds’ attractive relative value at current wide levels.


CSN 3Q25: Mining Strength Offsets Steel Weakness

<ul>
<li>EM spreads hold steady, while LatAm spreads expand 5 bps. </li>
<li>Brazil’s economic growth is expected to slow after four years above 3%, as persistent inflation, tight monetary policy, and limited fiscal adjustment weigh on the outlook. </li>
<li>Minerva Announces Divestment of Uruguayan Asset to Allana / YPF Advances Divestment Strategy to Prioritize Vaca Muerta Development / CSN Cimentos Brasil Finalizes Terms of R$550 Million Debenture Offering</li>
</ul>


EM spreads hold steady, while LatAm spreads expand 5 bps. 
Brazil’s economic growth is expected to slow after four years above 3%, as persistent inflation, tight monetary policy, and limited fiscal adjustment weigh on the outlook. 
Minerva Announces Divestment of Uruguayan Asset to Allana / YPF Advances Divestment Strategy to Prioritize Vaca Muerta Development / CSN Cimentos Brasil Finalizes Terms of R$550 Million Debenture Offering


<ul>
<li>Initiating Coverage on CSN: Overweight on Risk-Reward. We are initiating coverage on CSN with an Overweight recommendation</li>
<li>YPF and Eni Advance Argentina LNG Project with New Agreement Signed in Rome</li>
<li>The LatAm Aggregate Index contracted by 3 bps to 303 bps in the week ending Friday, June 13, 2025, and is now trading 35 bps below its 3-month average.</li>
</ul>


Initiating Coverage on CSN: Overweight on Risk-Reward. We are initiating coverage on CSN with an Overweight recommendation
YPF and Eni Advance Argentina LNG Project with New Agreement Signed in Rome
The LatAm Aggregate Index contracted by 3 bps to 303 bps in the week ending Friday, June 13, 2025, and is now trading 35 bps below its 3-month average.


Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<ul>
<li>We like <a href="https://www.smartkarma.com/entities/vale-sa" target="_blank" data-smartkarma-citation="entities:23731:1" rel="noopener">Vale (VALE US)</a> for its exposure to high-grade iron ore (95% of EBITDA) and capital return discipline, with a current dividend yield of 8% and 3.5x EV-EBITDA. </li>
<li>The cash flows from the iron ore business could be used to invest in base metals, such as copper, nickel, etc., to enhance the portfolio. </li>
<li>The key risk remains the overhang from the Mariana Dam disaster being settled for  ~25.7 billion USD (vs. the current market cap of 50 billion USD). </li>
</ul>


We like Vale (VALE US) for its exposure to high-grade iron ore (95% of EBITDA) and capital return discipline, with a current dividend yield of 8% and 3.5x EV-EBITDA. 
The cash flows from the iron ore business could be used to invest in base metals, such as copper, nickel, etc., to enhance the portfolio. 
The key risk remains the overhang from the Mariana Dam disaster being settled for  ~25.7 billion USD (vs. the current market cap of 50 billion USD). 


VALE US: Exposure to High-Grade Iron Ore With >8% Dividend Yield

<ul>
<li>LatAm credit markets ended the week mixed as the LatAm Aggregate Index widened to 280 bps while EM spreads and U.S. yields remained stable.</li>
<li>In 2Q25 earnings, Vista, Minerva, and YPF delivered strong results supporting Overweight views, while Suzano, Cemex, and Telecom face spread constraints amid operational pressures.</li>
<li>MercadoLibre’s growth remains solid but limited spread compression, and Pemex benefits from government support.</li>
</ul>


LatAm credit markets ended the week mixed as the LatAm Aggregate Index widened to 280 bps while EM spreads and U.S. yields remained stable.
In 2Q25 earnings, Vista, Minerva, and YPF delivered strong results supporting Overweight views, while Suzano, Cemex, and Telecom face spread constraints amid operational pressures.
MercadoLibre’s growth remains solid but limited spread compression, and Pemex benefits from government support.


Weekly News & Views - 2Q25 Earnings Recap

Brazil

Companhia Siderurgica Nacional S.A. (CSN) manufactures iron and steel in Brazil. The Company operates mines, an integrated steel mill, service centers, ports, and railroads.  CSN manufactures and distributes hot-rolled, cold-rolled, and galvanized steel products to the automobile, auto parts, civil construction, electrical equipment, and packaging industries.

Price Gauge
52-week Range	0.00 - 0.00
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Cia Siderurgica Nacional Sa (CSNA3 BZ)

CSN 3Q25: Mining Strength Offsets Steel Weakness

Maintaining Overweight on 2031s and 2032s for their attractive carry, spread pickup vs LatAm BB peers, and downside protection at discounted prices.

Leandro Gubler

EM Spreads - Weekly News & Views

EM spreads hold steady, Brazil macro update, YPF advances shale pivot, Minerva finalizes Uruguay asset sale, and CSN Cimentos prices R$550mn issue.

Leandro Gubler

EM Spreads - Weekly News & Views

Initiating coverage on CSN with an Overweight recommendation. YPF and Eni advance Argentina LNG project with new agreement. LatAm Aggregate Index...

Leandro Gubler

VALE US: Exposure to High-Grade Iron Ore With >8% Dividend Yield

We initiate coverage on VALE US, one of the world's biggest iron ore producers, with high-grade iron ore and low-cost production. The stock trades...

Sameer Taneja

Weekly News & Views - 2Q25 Earnings Recap

LatAm credit markets show mixed results, with some companies delivering strong earnings while others face operational pressures.

Leandro Gubler

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

CSN 3Q25: Mining Strength Offsets Steel Weakness

​Maintaining Overweight on 2031s and 2032s for their attractive carry, spread pickup vs LatAm BB peers, and downside protection at discounted prices.

Leandro Gubler

EM Spreads - Weekly News & Views

EM spreads hold steady, Brazil macro update, YPF advances shale pivot, Minerva finalizes Uruguay asset sale, and CSN Cimentos prices R$550mn issue.

Leandro Gubler

EM Spreads - Weekly News & Views

​Initiating coverage on CSN with an Overweight recommendation. YPF and Eni advance Argentina LNG project with new agreement. LatAm Aggregate Index...

Leandro Gubler

VALE US: Exposure to High-Grade Iron Ore With >8% Dividend Yield

We initiate coverage on VALE US, one of the world's biggest iron ore producers, with high-grade iron ore and low-cost production. The stock trades...

Sameer Taneja

Weekly News & Views - 2Q25 Earnings Recap

​LatAm credit markets show mixed results, with some companies delivering strong earnings while others face operational pressures.

Leandro Gubler

Maintaining Overweight on 2031s and 2032s for their attractive carry, spread pickup vs LatAm BB peers, and downside protection at discounted prices.

Initiating coverage on CSN with an Overweight recommendation. YPF and Eni advance Argentina LNG project with new agreement. LatAm Aggregate Index...

LatAm credit markets show mixed results, with some companies delivering strong earnings while others face operational pressures.