A deal slump tests LatAm DCM bankers
It was always going to be a tough year for debt capital markets in Latin America. A turbulent election calendar in three of its biggest economies and rising US rates had been expected to dampen issuance volumes. But few anticipated the drop-off would be so severe.
Internationally marketed Latin American debt capital markets issuance was $69 billion at the end of the third quarter, a fall of almost 40% compared with the same period in 2017, according to Dealogic. With around $32 billion of that issued in January alone – the busiest January on record – the dearth of deals in the intervening months has been brutal.
The economic woes in Argentina coupled with wider emerging-market stress saw issuance crater during the summer, with barely any deals printed between mid July and mid September. An increase in liability management exercises last year also saw many Latin American borrowers iron out their 2018 financing needs, further exacerbating the downturn.