July 1, 2009
by Ben MillerPetrobras rewarding visit to China in May underscores one trend while bucking another. The 10-year $10 billion loan it signed with the China Development Bank was a milestone in LatAm trade finance, for its size and geopolitical significance.
The deal funds Petrobras purchase of Chinese goods and services in the development of new oil fields. Excluding that and a similar transaction for América Móvil, however, LatAm trade finance was down substantially in the first five months.
Volume in the region stood at $1.71 billion through June 1, according to Dealogic, compared to $7.71 billion in the corresponding period of 2008. Last years total was $24.
Multilaterals, ECAs and China are covering for traditional providers of trade finance, who are expected to deploy less this year. However, commercial banks are poised to jump back in.