Europe should represent a fantastic new opportunity for Latin
American debt issuers, with the advent of a single currency and its
increasingly integrated capital markets.
However, the chaos in Argentina following its default on $141
billion of debt in December has made life a lot harder for European
investors and for prospective borrowers alike. The good news is
that European investors burned by their unhappy experiences with
Argentine debt are migrating to mutual funds managed by
professionals who are intimately aware of the concept of risk and
Argentina probably delayed its financial collapse by a year
or so partly because it was able to sell a lot of debt to less
discriminating retail investors, especially in Italy and Germany.
Individual investors in those markets would often take up to 80% of
the euro bonds issued by Argentina and other Latin American
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