When researching the annual focus on Latin American capital markets activity the toughest part of Euromoney’s trip to New York has been the 40-odd degrees of centigrade that are lost in the nine-hour flight from São Paulo.
This year, despite the visit coinciding with the ice storm that battered Manhattan in mid-February, testing the resilience of correspondents whose blood has been thinned by heat waves in Brazil, it was the frozen markets that were the biggest problem.
Typically, recent deals form the basis of discussion about the state of the markets and the nature of deals likely to come. However, there were no international debt transactions from Latin American issuers in the first three weeks of February – the markets closed until a $580 million deal from Brazilian oil and gas company Odebrecht on February 21. And in 2014 there has been only one equity deal that was forced over the line by very determined sponsors.
Ultimately, fund flows determine liquidity for both equity and bond deals. Data from the leading provider, EPFR, is the most widely used by the market to understand these flows. It points to a rapidly declining investor base for both.
