If you are a Latin American issuer looking to raise significant sums of cross-border capital, chances are you will cross paths with New York-headquartered law firm Cleary Gottlieb, region-wide Law Firm of the Year and winner of this award for the fifth consecutive year.
The truism that the firm is everywhere was easy to see over the past year as capital markets performed better than expected, says Jorge Juantorena, a partner at Cleary in New York and head of the Latin America practice. The pipeline of deals was strong even though US interest rates remained higher for longer than many in the market anticipated.
“Deal activity has been broad geographically as well as in terms of both debt and equity,” he says. “There was even a number of equity deals in different geographies, which was a very pleasant surprise for everyone.”
Juantorena notes that debt markets have been particularly busy, especially on the sovereign side, as have project financings and M&A transactions. In his view, players have come to realize that the market is not going back to the era of interest rates at close to zero and have adapted their expectations accordingly.
One area that has been less active, he points out, is high-yield debt. “We have not seen as many high-yield deals this year as we used to see five years ago,” he says. “Rates are not as appealing and we see many more issuers that would do high yield bonds, doing bank deals instead. Market windows are a bit more limited and favor blue chip companies and investment grade issuers.”
Sovereign issuers and blue-chip firms constitute the universe where Cleary feels most at home. The company advised on deals such as the $6.2 billion acquisition by a Mexican government-backed trust of a portfolio of clean energy assets from Iberdrola, the issuance of a $3 billion, triple-tranche bond by the Dominican Republic, and the $677 million IPO of Mexico’s BBB Foods. It also participated in landmark – and award-winning – transactions including for Brazil’s Vale, Chile’s Codelco and Argentina’s YPF, among others.
With a region-wide footprint and unrivalled access to issuers and investors, Cleary Gottlieb feels confident that capital markets will continue to create opportunities over the coming year.
It may take a while for activity to really gather steam, though. “I expect that the first quarter of next year will be kind of a wait and see period, as people want to see what [US president Donald] Trump does,” Juantorena says.