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United States : LATAM bond party to go on in face of volatility.

Increasing US interest rates should lead investors to withdraw money from emerging economies so those in Latin America suffering weak growth. However, debt bankers feel that the party has some time to go.

Latin America s debt bankers believe volatility caused by US interest rate increases and secondary market illiquidity will not derail the stomping progress of the area's cross-border bond market, which is set for another record-breaking year.

As investors chased yield among low rates, Latin American borrowers were among the largest beneficiaries. According to Dealogic, year-to-date new issue volumes in LatAm reached $120 billion, meaning 2014 will smash 2013's record of $126 billion. It would be the third consecutive record-breaking year.

With tightening anticipated at some point, some worry markets will not be attractive to Latin borrowers and that investors will decrease allocations to the area.

However, Max Volkov, head of LatAm DCM at Bank of America Merrill Lynch said that the record issuance levels represent the new normal even if rates start to rise .

2014 Al Bawaba (Albawaba.com) Provided by SyndiGate Media Inc. ( Syndigate.info ).

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Publication:Mena Report
Date:Oct 14, 2014
Words:179
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