Debt: Gearing Up
Sep 1, 2010
A busy June and July, the prospect of continued low interest rates and unrelenting gigantic fund inflows have DCM braced for a flurry of activity in September.
Bankers are optimistic that there could be $20-$25 billion more cross-border issuance to come from LatAm by the end of the year, perhaps pushing the year-end total past last year’s $70 billion. There was $52 billion issued through August 15, according to Dealogic.
"Technicals still work in issuers’ favor," says Bevan Rosenbloom, EM corporate strategist at RBS. The key is that real-money investors still have continuous inflows to put to work, he explains. This should continue to support the new issue market.
Volatility continues, though the Vix index has fallen below levels of May and early June which prohibited new supply, he says. The main risk to favorable issuing conditions is rough economic news. "US economic indicators will determine the openness of the markets," Rosenbloom says.
As long as risk appetite remains, issuers at all points on the credit spectrum should have...
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