Grim Cross-Border Debt Outlook for Remainder of 2007

Meanwhile, with year-end fast approaching and a string of bad days in the market, bankers and issuers expect little to no more cross-border DCM activity until 2008. The list of pulled deals since the Fed’s 50bp October rate cut is long and well-known, including names such as Sanluis, Cap Cana, Unialco, Banco Macro and Banco Mercantil. “The market is categorically closed for emerging markets and high-yield issuers,” says a LatAm DCM banker among those with an unfinished 2007 pipeline, noting that there is still a window in the local markets. Although homegrown Latin problems are relatively few, a January market reopening will depend on external factors. If news from the next Fed meeting and the big banks’ Q4 reports is encouraging, business as usual may resume in the New Year.