Latin Loans: Hanging in there
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Latin Loans: Hanging in there

For Latin American corporates the doorway to international bond markets is now locked and bolted for the foreseeable future. But what about the loan market? According to Eugenia Wilds, head of the Latin American loan syndication group at JP Morgan, the key bank lenders will hold fast in a storm.

"Like the Mexican crisis of 1994 it offers the opportunity for relationships to come to the fore in a region where they were previously not quite as developed," she argues. "Those relationships are now more mature. There is a strong basis on which people can say: I need to be there for my clients."

Reassuring words. But not everyone is so sanguine. "Typically loan markets tend to react more slowly than bond markets to a downturn," observes one banker. "The bond market has been shut for a number of weeks and the loan market is now getting there."

Even before Russia fell off the cliff and dragged the rest of the world's emerging markets with it, the Latin American loan market was experiencing a tough year. The local retail banks that had in the past provided the market with residual liquidity pulled out of loans en masse following the Asian crisis.

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