The market likes the Latin look

Few would have predicted in the dark days that followed Mexico’s disastrous devaluation of December 1994 that investors who had their fingers burnt would soon be clamouring for Latin debt again. Yet that is what has happened. Latin America, which appeared to have been shut out of the international capital markets, is back with a bang.

Sovereign borrowers tentatively began to test their ability to tap the international markets soon after the initial scare. The response was more favourable than they could have expected, so much so that the big sovereign issuers, notably Mexico and Argentina, have since fired a salvo of successful issues.