Gridlock in the Bond Market
Demand from institutional investors in Mexico's bond market outstrips supply. There are just not enough high-quality bonds around, but this could be changing.
For years, Enrique Coppel, who runs a popular family-owned Mexican chain of clothing and furniture stores, was exasperated by banks that seemed to thwart instead of help his company's expansion plans. Trying borrow money felt like begging, and even when the company succeeded in getting a loan, it was invariably expensive and too short-term. "In Mexico you can't work with the banks," says Coppel. "Every year the bankers start from zero in terms of reviewing your information. You cannot count on them."
Clearly, Coppel S.A. needed to find an alternative source of long-term financing for its strategy of buying land and building its own stores. Last June, instead of borrowing from a bank, the company raised long-term money in the local capital markets at competitive rates. Bookrunners Scotiabank Inverlat and Santander Serfin helped Coppel raise $97.6 million with a peso-denominated bond sold to insurance companies and private pension funds. The...
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