Latin American firms getting funding in US.

Long shunned by many investors as a backwater marked by dictatorships, poor infrastructure and no strong history of capitalism, Latin American is drawing new interest from investors in the U.S. In turn, growing financial strength and sophistication there may help North American companies looking to expand south of the border.

Trenwith Securities LLC, a boutique investment bank, has been busy lining up financing for middle-market Latin American can firms, building from its presence in a dozen Latin nations. Most of those firms are in manufacturing, and many are family-owned, says Luciane Roessler, managing director in Trenwith's International Investment Banking Group.

Typically, Roessler says, Trenwith finds buyers for both senior and subordinated debt. Most of the pricing is bench-marked against the London Interbank Offered Rate (LIBOR), though some deals are done at fixed rates, she says. Terms are getting longer, she adds. "Five years used to be the limit, based on risk insurance policies. But some terms have gone to eight years," and she says Trenwith placed 12-year debt recently for a Brazilian firm.

Companies in Latin America typically can't really find financing locally except through their state governments, and much of that comes through development banks that can be very heavy in red tape, she says. That makes funding from U.S. firms attractive, though there is also some interest from European lenders, especially for project finance.

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Still, Roessler concedes, "A very big issue is bias against Latin America. Some companies are being asked to set up subsidiaries in countries with better reputations" in order to obtain funding. "Banks that already have a presence there are most comfortable with the idea of lending."

Compensation: What Companies are Targeting
Percent of surveyed companies employing these programs

                               More           Project
                      Signing  aggressive     milestone  Spot cash
                      bonuses  pay increases  awards     awards

IT                    67%      43%            77%        85%
E-commerce            26%      10%            18%        49%
Engineering           40%      28%            34%        56%
Accounting & Finance  52%      25%            31%        78%
Sales & Marketing     50%      23%            23%        69%
Customer Service      21%       5%            21%        69%
Human Resources       32%       7%            22%        73%
Internal Auditors     31%      12%            19%        58%
Security              16%       7%            12%        46%

Source: Mercer Human Resource Consulting, 2006/2007 U.S. Compensation
Planning Survey