Latin America – Ghosts of the past haunt new dawn
What alchemy can turn unloved Latin debt into investment grade gold? Securitization is one approach, if the borrower has foreign-currency receivables to back structured bond issues.
Another suggestion that has aroused the interest of many Latin corporates of late is the use of guarantees. Just as the World Bank guarantee for the republic of Argentina issue in October persuaded investment-grade buyers to put their money into Argentine risk, so bonds carrying guarantees in the form of political risk insurance could reassure investors and keep funding costs down.
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