Latin American issuers have built up a following among wealthy investors in Hong Kong and Singapore – as long as commodity prices don't plunge.
When Mexican tortilla maker Gruma sold a $375 million
perpetual bond last November, 42% of its investors were from
Asia. That's remarkable given that Gruma the world's No.
1 producer of corn flour and tortillas is relatively
unknown outside Latin America and the US.
Gruma was able to develop a strong base of new investors
from Hong Kong and Singapore. These investors, mainly private
bank clients and Asian banks, were drawn by the hefty 7.75%
coupon. That coupon must be paid for eternity unless, after
five years, Gruma exercises its quarterly option to call the
But it wasn't the coupon alone that drew in buyers. These
investors also showed that while they weren't experienced with
tortillas, they appreciated a well-run company. Gruma's pre-tax
income grew 36% to $90.6 million in the first nine months of
2004, compared to $65.5 million during the same period
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