Until recently investment banking in central America and the Caribbean was about having the best debt offering. The few international debt capital market mandates were obviously crucial to gain this credibility, but a presence in dollar and local-currency loans was also critical. Today it’s more complicated. The equity capital market still doesn’t really feature, but sustainable finance is crucial to the region. Moreover, the growing cross-border presence of many companies active in these countries means that transaction and treasury services are now areas of true competitive differentiation.
Citi, led by Pablo del Valle, the bank’s chief executive of Latin America and the Caribbean, has it all in the region: presence, debt and banking services.
In 2023 the bank led on some of the region’s most important international capital markets transactions. The deal for Costa Rica’s Liberty, a debut bond offering in the international markets, is a good example. The company priced a $400 million offering of sustainability-linked notes that priced at par to yield 10.877%. Citi was sole left lead on the deal that included IDB Invest acting as lender of record in an A/B loan transaction, which created a novel structure to provide withholding tax savings to the issuer.
Citi also led on sovereign transactions in the region, with a $300 million bond for Jamaica and its global peso issuance for the Dominican Republic. This was the largest ever local-currency offering printed in the global debt markets and the largest liability management transaction over peso-linked notes performed by the Dominican Republic.
Citi also demonstrated its unrivalled ability to tap local debt markets in the region leading the first bond in the Dominican Republic from an international issuer when Haina Investment Company raised $105 million. The bond was heavily oversubscribed; and it was noteworthy that Citi managed to secure a strong retail bid to support the deal’s dynamics.
Also in the Dominican Republic, Citi also showed its M&A capability with its $320 million acquisition financing of Gerdau’s stake in Gerdau Metaldom by Inicia through its asset manager Atria Advisor – the deal was the largest ever M&A from a corporate in the industrial sector.
However Citi also showed its ability to evolve into the social finance banking sector during 2023. In Trinidad and Tobago, Citi supported access to affordable housing for 700 households and expanded financial inclusion by providing funding to individuals that couldn’t secure it elsewhere in the financial system. Staying with this theme, in Guatemala, Citi structured a social trade loan in local currency to Fundación Empresarial, a private microfinance institution – the first such trade loan in Latin America.
The breadth of local FX and trade solutions maintains Citi’s preeminent position with multinational companies and their subsidiaries
Citi is also able to make its physical presence pay – even in an increasingly digital world clients still appreciate the ability to meet in person. This hybrid service is proving powerful as Citi has invested in heavily modernizing its treasury and transaction services. Liquidity management services are also offered digitally to companies operating throughout the region. The breadth of local FX and trade solutions maintains Citi’s preeminent position with multinational companies and their subsidiaries, as well as the increasing number of pan-regional companies operating throughout central America and the Caribbean.
