Demand for local currency fixed income is back, tracking
appreciating LatAm currencies and flaring rates differentials. Structural shifts support the trend, but can it last?
América Móvil (AMX) is a frequent star of LatAm issuance, beloved by investors despite its razor thin spread and feared by bankers for its rigorous execution standards.
Biggest, tightest, longest, cheapest. Superlatives abound when describing LatAm capital markets and advisory for the last 12 months, and many bankers expect the good times to continue rolling.
Brazil’s BNDES has become a regular in the DCM after returning in 2008 from a 10-year hiatus.
The State of Mexico (Edomex) in August issued a much anticipated 4.1 billion peso 20-year local bond, the first securitization of future flows of income from residential property fees from a Mexican state.
The rapidly rising tide of LatAm fixed income lifted all underwriters in 2010, creating at least four serious contenders for Best Bond House.
After suffering derivative losses in the 2008-2009 crisis, Brazil’s Aracruz Celulose was purchased by Votorantim Celulose e Papel.
Uruguay hopes to invigorate local capital markets with new legislation. The country’s vice president says public companies may soon list minority stakes locally.
Southern Copper Corporation (SCC) saw jumbo demand for a $1.5 billion April 2010 issue of new 10 and 30-year bonds, which were tightly priced but still traded up.
Revived European debt woes put a lid on last yearâ€™s bumper DCM volume, which was fuelled by unprecedented fund inflows and tantalizingly low rates for borrowers.
At a time when the syndicated loan market was still thawing from a deep, crisis-driven freeze, Americas Mining Corporation (AMC), a wholly-owned subsidiary of Grupo México, provided an encouraging sign.
A January 21 Daily Brief entitled...
A $1.5 billion dual-currency bond issue in July 2010 of dollar denominated and global-local notes marked the re-emergence of Chile, a historically infrequent issuer, and set a benchmark for its corporates.
Colombia paved the way for LatAm issuers in April with an $800 million 2021 equivalent global TES bond. It braved the market to issue the first global local currency deal from LatAm since 2007, according to Dealogic.
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Are populist governments like Venezuela & Argentina turning pragmatic?
In some ways
At a fundamental level, the issue is how to generate healthy returns in the medium to long term. Policy holders can see their fund go down over the course of a week or a month, but what we really should be looking at is returns over 20 or 30 years.
Daniel Schydlowsky, Peru’s banking, insurance and private pension fund regulator
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