LatAm DCM Revenue Down, Liquidity Risk Up

LatAm DCM revenue totaled $202m through the first nine months of 2008, according to Dealogic, representing a drop of 40% from the corresponding period of 2007. Tighter credit markets saw a 36% drop globally, to $11.4bn. Despite lower refinancing needs, tough borrowing conditions and reduced appetite from investors have increased risks related to liquidity, Moody’s says. “As long as the debt capital markets remain closed to the majority of issuers, funding needs and liquidity risk may have an increasingly important credit role over the coming quarters,” the agency states. It expects volatility and uncertainty to prevail over the next 6-12 months, with widening spreads and an unfavorable relative yield in comparison to other debt classes and regions continuing to undermine cross-border DCM access.