Samurai Bond Market: LatAm Issuers Return

Mar 3, 2010

Sovereigns have returned to Japan for diversification at an attractive rate. Corporates are another matter and the scope of the Samurai market remains to be seen.

by Ben Miller

Tapped often in the 1990s, the Japanese investor base shied away from Latin American risk after being burned by the Argentine default of late 2001. After another more global credit crisis, which reminded investors that the developed markets are also risky and directed attention to stronger EM borrowers, the Samurai market may be ripe for the plucking.

After years of almost no activity from the region, two of its more reputable borrowers, Mexico and Colombia, locked up sizeable funds in late 2009. Both took advantage of 95% guarantees from the Japan Bank for International Cooperation (JBIC), under a program the multilateral developed to assist EM borrowers.

"We want to reestablish our presence in the Japanese market," says Gerardo Rodríguez, Mexico’s deputy undersecretary for public credit, after placing one of the largest non-dollar EM bonds last year, at nearly $1.7 billion equivalent. "We are looking forward to...

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