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 reward.
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 issuers. ...
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