Nuam Exchange — the recently formed holding company that owns the stock exchanges of Chile, Colombia and Peru —aims to allow corporate bond issuance on the countries’ unified market next year before advancing into equity deals, CEO Juan Pablo Córdoba told LatinFinance.
“Hopefully next year we can start with the issuance of corporate bonds as a single market,” he said in an interview.
The main aims behind the unification of the three Andean markets is to spur more issuance by lowering the costs for issuers and allowing more investors to buy their securities.
“If you list in one country, you can distribute your securities in the other two countries with no additional regulatory requirements or reporting,” Córdoba said. “You file in one country, structure your issuance as you please, and you can distribute it in the three countries.”
Córdoba was hired at the start of this year to spearhead the merger of the exchanges in Bogotá, Lima and Santiago, coming to the post after years running the Colombian stock exchange.
He said that the next step will be to allow equity issuance on the single market, starting in the first semester of 2025.
“The value proposition for issuers is that with a single process, you have access to more investors, and when you have access to more investors your chances of finding better financing are higher,” Córdoba said. “You’ll have a lower cost for doing the issue but in a broader market with more participants, more competition, lower rates — and hopefully better financial conditions.”
This is important for companies looking to grow their businesses in the region, he added.
“Corporations in Latin America need access to long-term competitive financing, not just short-term bank financing,” Córdoba said.
Another advantage of the single market is the opportunity for arbitrage, he added. A company operating in various countries can choose where to raise funding depending on where interest rates or market conditions are most attractive at any one point.
“This provides more flexibility to issuers,” Córdoba said, adding that as the funding is in local currency, this reduces the risks inherent when borrowing in foreign currencies.
While the market will initially cater to companies in Chile, Colombia and Peru, Córdoba said Nuam is open to companies from elsewhere in Latin America that want to issue debt or equity.
“This is not exclusive,” he said. “Everything is open to anybody who registers and lists as a company in one of the three countries.”