August 1, 2003
Latin American companies, like their counterparts in the United States, have been hard hit by the economic downturn that has dug in its heels around the world. Those suffering the most are companies that during the economic boom of the late 1990s tapped the US debt markets for secured and highly sophisticated US-dollar denominated financing but operate their revenues primarily in their local Latin American currency. Poor financial results, bleak economic forecasts and currency devaluations throughout Latin America that increased corporate debt loads forced many of these companies to default on their US dollar denominated debt.
In response to threats of legal action or foreclosure from thei
Troubled Latin American companies increasingly are seeking to reorganize their finances under United States bankruptcy regulations. They provide more control and greater certainty for many companies than their home country's insolvency laws.