Asia-Latin America: Red herring?

Nov 1, 2012

Latin America’s trade with China is booming. Yet the relationship between the two regions is a work in progress – as are moves to raise debt in renminbi

By Elliot Wilson

When América Móvil took the plunge into China’s offshore renminbi-currency debt market this February, the world took notice.

This, after all, was a hefty sale – and the first so-called dim sum bond issued by a Latin American corporate. Preparation for the sale, underwritten by HSBC Securities, had been faultless. The giant Mexican telecom operator, owned by Carlos Slim, ran roadshows the previous September in Singapore and Hong Kong.

Investors were duly wowed, and América Móvil raised Rmb1 billion ($158 million) in three-year debt: a twice-oversubscribed sale with a coupon of 3.5% that compared favorably with a similar deal by China Development Bank, a major Beijing policy lender.

Closer links

Slim’s move was clever, strategic and timely. Trade between Mexico and China has soared: bilateral trade with China jumped to $58 billion in 2011, from just $542 million 16 years ago.

Mexico is also a key...

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