Latin America: Standard Chartered eyes sovereign mandates
‘Natural extension’ of bank’s credit strategy; reg capital deals still interesting to Latam banks.
Standard Chartered may begin pitching for mandates from Latin American sovereigns’ international debt capital markets transactions.
Rodrigo Gonzalez, head of debt capital markets for the Americas, says the bank has been expanding its credit trading team under its new management and, coupled with its strength in emerging markets, underwriting sovereign transactions in Latin America “could be a natural extension” of the bank’s fixed income ambitions.
Gonzalez concedes the bank will face stiff competition should it decide to enter the sovereign fray.
“Yes, there are about 20 investment banks already doing this, but we are the EM specialists,” says Gonzalez. “We are big in Asian and African sovereigns and can give our clients access to these investors in the Americas, Europe and increase their diversification into Asia. If we added sovereign coverage, that would complete our product suite in both the secondary and primary markets.”
He agrees that “sovereigns don’t pay much” but adds that: “They issue a lot – if you could get 5% [market share] it’s still significant.”
From a DCM perspective in Latin America, Standard Chartered is focused on financial institutions’ transactions, although the bank has a “handful” of large corporate clients – typically those from the region that are heavily active in Asia, Africa and the Middle East.