Is the future of LatAm DCM local?

The volume of deals from Latin American issuers in the international debt capital markets – almost all dollar-denominated – has spiked in the past three years. In 2012 the $100 billion threshold was broken, after reaching more than $90 billion in each of the preceding two years. International DCM bankers working in the region have never had it so good. Deals from nearly all the countries in the region, from all parts of the credit spectrum – for all tenors and largely all structures – have attracted big international investor demand. The market norm now appears to be orders of at least three times book. Bookrunners have used this unprecedented liquidity and demand for Latin American credits to lower yields and compress spreads. Then the bankers get on the road again, roadshowing the latest cost of financing available to the region’s corporates: “Get in on this,” they say. “Pre-fund; diversify, lengthen and cheapen your cost of funds.”

But even as the bankers today remain busy in the midst of their shuttle negotiations, and even as the pipeline is reported to remain strong, some market observers are questioning the sustainability of these recent record volumes. Are we are seeing, they ask, a market that is growing and will continue to do so? Or are we seeing an Indian summer when the heat in the market is being caused by record low US interest rates, masking the underlying real story: that of the growth in the domestic capital markets?

For the full feature go to Euromoney’s website

Advertisements
This entry was posted in Blog and tagged , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s