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. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Debt capital markets: Latin American sovereigns on track as corporates squeezed

Latin American sovereigns are on track to meet their 2009 financing needs after an impressive start to the year, according to senior debt bankers. Barclays Capital reckons that 34% of this year’s estimated total of $19 billion of emerging market sovereign issuance has already been successfully placed despite fears that the US and Europe would crowd them out. Latin American corporates, in contrast, are facing more difficult and expensive financing.

With the financing needs of the US and European governments, corporates and banks estimated at $4.5 trillion, emerging markets borrowers will feel a squeeze in 2009. Only the best-quality sovereigns and blue-chip corporates are likely to get away on the public markets.

Three Latin sovereigns have issued recently – Mexico, Brazil and Colombia. On December 18, Mexico priced a $2 billion 10-year bond at 390 basis points over US treasuries, via Goldman Sachs and Morgan Stanley. On January 6, Colombia and Brazil both priced $1 billion deals at 503bp and 370bp over treasuries respectively. Morgan Stanley and Barclays Capital priced Colombia’s deal; Goldman Sachs and Merrill Lynch led Brazil’s deal. Mexico paid a 40bp new-issue premium over its existing curve; Brazil and Colombia paid 50bp.

The Brazil deal was criticized for its aggressive pricing, and the bonds traded below their offer price after launch. Still, these deals suggest that there is investor appetite for strong Latin credits, albeit borrowing opportunities will be limited.

"I think that Latin sovereigns will continue to price aggressively as long as they continue to demonstrate fiscal discipline," says Paul Spivack, co-head of global fixed-income syndicate at Morgan Stanley. "A lot of money has poured into emerging market credit funds in recent years.

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