Sterling Window Opens for LatAm

Other high-grade LatAm issuers like Petrobras, Vale and America Movil will have access to the sterling market following this week’s Pemex issue, say LatAm DCM bankers. Those with a global business or needing UK currency exposure are among the most likely names. And borrowers who have overused US markets are also candidates. However, the costs of diversification may deter issuance short term, other bankers add. And a LatAm banker at a European shop says GBP generally is challenging market and tricky to follow. Other issuers are possible, but not very likely, he adds. “You have to be high grade,” says a banker close to the sterling market. He adds that LatAm sovereigns are unlikely to use the funding alternative. “Most are comfortable with where they are in dollars. They would rather put all the liquidity in the dollar curve,” says the banker at a European shop. Other LatAm past issuers in sterling include Mexico and CAF.