LatAm bond markets: HSBC – building from debt
HSBC is pushing hard in its drive into Latin America’s markets. From a DCM foundation, it is moving into other areas, though competition will be fierce.
By any measure, HSBC is one of the leading debt capital markets houses in Latin America. The bank has opened new structures, currencies and created new benchmarks in terms of size and pricing for a wide range of credits throughout the region. It’s a debt powerhouse. The bad news for the competition is that, in recent years, the bank has slowly been building its M&A and equities franchises too. Just like with DCM, it plans to build from scratch, organically, and has lofty ambitions.
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This time, however, the competition aiming to block HSBC’s growth will be even fiercer – since the development of its debt platform the regional investment banking landscape has been transformed by the emergence of the local firms that grew into positions of dominance in their local markets and have begun expanding abroad. Add to this stronger and more fragmented competition a more volatile product base – Latin American equities in particular are facing stiff headwinds – and a successful, smooth replication of HSBC’s strategy in these two product areas looks far from assured.