Rebuilding the Balance Sheet

Feb 1, 2004

When Argentina abandoned its currency board early in 2002 after 11 years, the peso promptly sank by 75%. The devaluation, coupled with the biggest default in history, crushed Argentina's economy. The crisis also triggered huge losses at Bladex, the trade finance bank. With over $1 billion in loans out to Argentine companies, it faced the thankless task of provisioning for potentially heavy losses, protecting its preferred creditor status and its investment grade rating.

Once the worst of the crisis was over, Bladex needed to rebuild its balance sheet. Advised by BNP Paribas and Deutsche Bank, Bladex set its sights on raising $100 million through a rights offering. Surprisingly, given the damage inflicted by Argentina, Bladex was able to raise 50% more than it set out to last June. LatinFinance has picked this as Equity Deal of the Year for 2003. The issue both raised a substantial amount of capital for...

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