September 1, 2001
These are lean times for investment bankers, especially those working in Latin America. It is years since business has been this bad. The volume of privatizations, initial public offerings, mergers and acquisitions, and bond issuance has dwindled. Competition for mandates has become more vicious than ever, especially in Brazil, the region's most important market.
Fees have crumbled. Last year, rival bankers scorned Merrill Lynch for its 46 basis points underwriting fee for a $4.33 billion equity offering for Petrobras, the Brazilian national oil company. What looked paltry then looks princely today. In July, Salomon Smith Barney underwrote another Petrobras equity offering of $701.7 mi
Fees are down firmly in spite of consolidation on Wall Street, and deals that once looked paltry look princely today. Yet issuers and their bankers agree the lean years are unlikely to last much longer.