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.
“From a strategy perspective, it’s always hard to really anticipate what the supply equation is going to look like; most people felt like supply would be down, but perhaps not down as much as it is,” says Dennis Eisele, head of Latin America DCM at Deutsche Bank.
For banks grappling to maintain league table status, winning mandates for jumbo deals has been critical: missing out on those in a year of declining volumes can have an outsized impact not just on the rankings but also on revenues.