The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Small but sound sovereigns attract cash-rich investors

It’s not all bad. The world of international finance works in mysterious ways, and right now it looks as though central America is actually a beneficiary of Argentina’s default and the US recession.

No-one expected this. After the Mexican economic crisis of 1994-95, the tequila effect, as the subsequent contagion was known, devastated the Latin American region for years. But today, the tango effect of Argentina's $95 billion bond default seems barely to have spilled over into Brazil. Even Uruguay, home from home for wealthy Argentines, came to the market with a $250 million bond in November.

The Dominican Republic started the ball rolling as early as September 20, with a deal originally slated for September 11. The $500 million five-year bond paid came at a premium of just 25bp over the expected price on September 11, largely because of the size and strength of the pre-tragedy order book.

By the beginning of November, Guatemala and Panama had both issued bonds from scratch, and there was talk of a Barbados deal. Total bond issuance for the region will top $3 billion this year, up from $1.1 billion in 1999 and $1.4 billion in 2000.

And central American financial activity is not confined to sovereign bond issues: at the beginning of November, the largest supermarket operators in the region pooled their resources into a joint-venture holding company called Carhco, which immediately became the number one supermarket company in Costa Rica, Guatemala, Honduras and Nicaragua, with a strong presence in El Salvador and aspirations in Panama.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree