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Emphasizing the Positive

Sep 1, 2001

Argentina has cast a long shadow over the region, but a select group of issuers can still raise capital in any form, as long as they get the price, structure and timing right.

At the height of the northern hemisphere summer, when markets are normally in the doldrums, innovative and successful deals came out of Latin America, proving that investors are able to look beyond Argentina's crisis and consider a deal on its own merits. But issuers need to offer investors structures with plenty of reassurance and hefty yields.

US high-grade investors in particular liked the attractive yields available from Latin America's less risky credits. El Salvador, an investment grade issuer, went to the international market in July to raise $353.5 million with a 10-year bond. Credit Suisse First Boston and Deutsche Bank led the deal, priced at 350 basis points over US Treasurys. The issue required courage, coming at a time when the market was wracked with anxiety over a possible Argentine default.

Rafael Barraza, governor of El Salvador's Central Bank says, "We could have closed the deal with just...

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