In a busy year for Latin capital markets, law firm Cleary
Gottlieb once again demonstrated its broad expertise across
product areas, taking part in several of the most important
transactions of 2012 in a range of asset classes.
Activity in Brazil was less than in the past, but other
countries, notably Mexico, were there to pick up the slack,
says partner Jorge Juantorena. Cleary Gottlieb advised banks
for petrochemical producer Alpek on two deals. It represented
the bookrunners in Alpek’s May 2012 IPO and the
banks working on its subsequent debut global bond offering in
The Grupo Alfa unit’s IPO was the first in
Mexico this year and was oversubscribed, with 50% going to
domestic accounts and 50% to international accounts. Later in
the year, it worked as underwriter’s counsel for
Mexichem, a $1.2 billion capital increase and $600 million debt
and liability management deal.
In Chile, it acted as counsel to Codelco in its $1.9 billion
financing from Mitsui and related deals, and helped negotiate a
29.5% buy of Anglo American Sur from Anglo American and
"Just as Brazil cooled off a bit, Mexico and Chile heated
up," Juantorena says. With offices in Argentina for the past
few years and an office in Brazil that opened last year, the
firm still has most of its LatAm resources based in New
Another notable ex-Brazil deal, he says, is
Peru’s Cementos Pacasmayo, the
country’s third-largest cement producer, which
launched its first ADR in February, raising $264 million.
Cleary Gottlieb acted as underwriter’s counsel in
the IPO, one of the few to be SEC-registered.
Juantorena highlights the number of Mexican IPOs in the
pipeline, driven by the wave of confidence after the recent
election and the fact that it came out both predictably and
without much disruption after the results were announced.
"The perception is that Mexico is undervalued so investors
who are investing in LatAm often feel they’re
overexposed in Brazil and underexposed in other places and
looking to invest there," he says.
Investors seem to sense more stability there, he says. The
bulk of deals should come in the first quarter of 2013 and
their reception should be a good indicator for how the rest of
the year pans out.
"It’s going to be very telling, if they are
able to go, because IPOs are among the most delicate types of
deals," he says. Healthy activity continues in Brazil, with
activity in Chile on the rise.
The number of debt restructurings is likely to decrease in
the coming year, and Juantorena expects they will account for
10% of deal flow from the region, from 20%-25% in 2012, as
One of the firm’s most noticeable deals this
year was a $6.2 billion debt exchange for Cemex. It was both
large and complicated, he says, involving "virtually every
major bank in New York, London and Mexico." Cleary Gottlieb
advised the bank steering committee.
"People expect complete dedication and commitment, so as a
lawyer, that’s one of the most fun types of
projects to work on," Juantorena says.
In the sovereign space, the firm worked on a 2.2 billion
peso deal in August for the Mexican government, and also in
December 2011 it advised on a 2.2 billion peso deal for
Juantorena says more M&A deals are on their way although
business related to those deals is shifting away from using US
firms in many cases to using local counsel, as the quality of
local firms continues to improve.
"A lot more M&A activity is being governed by local
laws," Juantorena says. "People will still hire US counsel for
the large to extra-large deals but for the deals that are just
medium to large, people will use only local counsel."
Bond deals will continue to be a major focus. The low
interest rate environment has prompted large volumes of bond
deals, he says, alongside cash tender offers involving debt.
Moreover because of the general financial uncertainty in
Europe, he says: "Latin America looks relatively stable by