IFR Special Reports

IFR Latin America 2011

It’s been a good twelve months to be a market outside of Europe and the US. With many developed nations struggling under the weight of public and private debt, most emerging markets have been arousing a lot of attention from growth-hungry investors. But some markets have emerged more than others, and Latin America is definitely home to some of the sexier examples.

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Stories in Special Report

Domestic flourishing

Brazilian companies are increasingly looking to domestic debt markets as investors show greater interest, tenors extend and government-backed debt financing gets more expensive. Denise Bedell reports.

Looking long term

To view the digital version of this report, please click here. The Brazilian domestic bond market has traditionally revolved around floating rate debt, indexed to the short-term CDI rate, the average of all overnight transactions rates in the country, even for longer tenors. However, the markets are excited by a recent presidential decree and provisional measure, taking effect on January 1, aimed at increasing the level of long-term financing. Following the changes, non-residents from low tax jurisdictions pay a zero-rate withholding tax on...

Mexican rivals

To view the digital version of this report, please click here. Solid economic performance in most major markets is expected to continue throughout the coming year, which should help maintain the cycle of growth and increased trade now being enjoyed by Latin American companies. “Latin America has been growing faster than expected at the end of 2010 due to strong domestic demand growth, improved terms of trade and strong capital inflows,” Juan Rutz, chief economist for economic scenarios at BBVA Research, said in a report. “Nevertheless, we...

Attractive proposition

Brazilian companies are expected to sell a record amount of debt in overseas markets this year, while Mexican corporates are also set for a bumper year. It continues a trend of increasing interest in Latin American debt from outside investors going back as far as the credit crunch. Jason Mitchell reports.

Currency questions

Global local currency bonds have been a firm favourite among emerging market sovereigns in the last 12 months. Latin America dominates a market that saw US$5bn worth of issuance last year, but the region’s supply is set to diminish as sovereigns wrestle with the twin challenges of currency appreciation and mounting inflation. Hardeep Dhillon reports.

Self sufficiency

A number of countries have tried to position themselves as regional hubs for Latin America, allowing corporates from across the continent to borrow in local currencies, insulating them from market disturbances in Europe and the US. But various factors – not least illiquidity – have prevented the idea from getting off the ground. Savita Iyer-Ahrestani reports.

Reais estate

Brazil has a booming real estate finance market but the government is encouraging developers to focus more attention on residential property by raising the cost of funding for commercial real estate. But nobody is sure what unintended consequences the changes could have. Jason Mitchell reports.

League tables

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Closing the gap

Brazil is set for a healthy year of equity capital market activity in 2011 but it is unlikely to achieve the record-breaking heights achieved in 2010. The country is the centre of ECM gravity in LatAm, but the picture is looking brighter for other countries in the region. Jason Mitchell reports.

Still reeling

Latin America’s syndicated loans market has still not recovered from the international financial crisis, when many banks ceased lending and companies turned to the bond market. But activity is expected to pick up this year as the region’s M&A activity gathers momentum. Jason Mitchell reports.

Special Report

Special Report

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