A period of unprecedented access to capital markets funding
for Latin companies risks coming to a sudden end when the US
Federal Reserve begins to unwind its extraordinary monetary
stimulus, the head of one of the region's biggest companies has
In comments that add to a growing chorus of concern over the
risk of a sharp rise in US Treasury yields, Carlos Garcia
Moreno, CFO at America Movil, told LatinFinance that
companies from the region should take advantage of today's
"windows of opportunity to raise funds at relatively cheap
rates in the capital markets
– or risk a dramatic worsening of the
climate that could come sooner than many expect.
"There's this notion that you will only have a graceful exit
[from low US interest rates]," he said. "Well, in the past,
markets have not been graceful. But we are told 'this time is
He would not rule out the possibility of a market crash similar
to 1994, when Alan Greenspan surprised the market by doubling
benchmark lending rates in 12 months.
But he said the implications this time would be "bigger"
because of the US central bank's unprecedented $3.3 trillion
Garcia Moreno added that today's funding conditions were
exceptional. "On the one hand, you see lower rate, base rates,
relatively low spreads. On the other hand, you actually have a
market and it's open," he said. "You have to go to the markets
when they're open. You don't know where they're going to be [in
"Many companies have not taken the opportunity," he added.
Garcia Moreno said that while "many people are still trying
to understand what demand will be like when rates start to pick
up," markets should not forget the "lessons" of the past.
His comments came as benchmark Treasury yields rose to fresh
two-month highs close to 2% early Tuesday as Wall Street stocks
rose, with the Dow Jones industrial average hitting a record
Garcia Moreno said that "there's a consensus building that
US growth has little downside." The risk for the Treasury
market is that stronger economic data from the US could
complicate an already nervous debate on when the Fed should end
America Movil has taken advantage of several sources of
funding. It retapped its 2022 global peso bonds in February to
raise 7.5 billion pesos ($590m), and soon plans to add up to 10
billion pesos more. For maturities under 10 years, Garcia
Moreno says the Swiss and European markets make the most since.
The company recently raised 300 million Swiss francs ($311
The biggest change has been the rise of the region's
institutional investors, he said. "They are now here to stay.
It's not just the local players it's also the pension funds
from other Latin American countries investing in other
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