Bank of America-Merrill Lynch and Santander led Dealogic’s Latin America and Caribbean debt capital markets league tables at the mid-year point, after a first half with about 25% less bond issuance from the region, including more than 30% less cross-border issuances, than a year ago, shows data from Dealogic.
| (Source: Flckr: James Manner) |
Bank of America-Merrill Lynch was the top bookrunner for international issuances. Santander was the top bookrunner for domestic and international issuances from LatAm and the Caribbean over the period, according to Dealogic.
While they say corporate problems in Brazil have dampened overall issuance this year, both bookrunners are bullish on the second half.
“The reality is that the volatility has not really translated into poor secondary [market] performance and that’s key for investors to continue to be engaged in our market,” said Max Volkov, head of LatAm debt capital markets at BofA-Merrill.
“This year we are very optimistic. We don’t see the Fed moving too aggressively in terms of hikes, but 2016 is a different ballgame.”
Putting aside Brazil, and assuming a benign global environment, the outlook is positive for the rest of LatAm, said Dan Vallimarescu, head of Americas debt capital markets at Santander. “We expect issuances will remain strong going into the last half of the year.”
But timing would be crucial, he cautioned: “It is more important today than it has been maybe in prior years, to just pick the moment to come to the market,” Vallimarescu said.
While heading into the summer slowdown, bankers, issuers and investors will be watchful of the US Federal Reserve and a possible interest rate hike this autumn.
“The path of hikes is supposed to be relatively smooth between September and 2016 and there could be a surprise when the Fed will be forced or will want to move more aggressively than what the market feels,” said Volkov. LF