Local Markets More Attractive, Say Bankers

Amid the international meltdown, New York-based DCM bankers say the more attractive financing opportunities for many LatAm credits will be in the local markets. Bankers at Wall Street shops say pricing levels in the local secondary suggest a pickup in domestic issuance come September. “The repricing is not as bad [in the local markets,]” says a New York trader, adding yields on recent local deals have been aggressive to the point where adding the cost of a swap makes a local offering unattractive for foreign investors. Recent offerings by Mexico sofoles Patrimonio, a MXP400m in 2012 asset-backed notes, and Metrofinanciera, which offered MXP1.6bn in 2014 notes backed by construction loans, were viewed by bankers on the deals as having benefited from the strength of the local markets. “There are a lot of opportunities for issuers that want to issue locally at attractive levels,” adds a trader. However, any entity wanting to do lower rated deals or achieve significant size or tenor will have to wait until dollar markets reopen.