Latin Finance - November/December 2009 - 2

Front Notes Standing up to China ore good news for an already bulled up LatAm market comes from China, which is bearing gifts in the form of large and seemingly cheap financing. Facilities for América Móvil, Petrobras and Coca Codo Sinclair will funnel at least $12.7 billion in Chinese cash to Latin borrowers this year. More is on the way. The Asian nation has accumulated more than $2.1 trillion in foreign reserves and is on a LatAmwide spree to tie up raw materials that can feed over 1.3 billion people. Much of that population is impoverished, and the communist government aims to create value for its people, generate jobs, and raise per capita income. To hit target, China requires steel, copper, oil and protein – all of which LatAm has in abundance. The flip side of the equation is that LatAm grapples with the same social issues and is also trying to become less irrelevant on the world stage. It has a chance now to cut a good deal and make sure raw materials are not sold for a song, only to be bought back later as Chinese finished goods. On the surface, Chinese investors take a long view, unencumbered by typical buyside considerations like valuation or political risk. This means doing business in Ecuador, or overpaying for a steel asset, since everything is worth a lot when you broaden the timeframe to 100 years. A committed long-term investor for a project no one else will touch has to be a good thing. And China is an important trade partner for LatAm, as well as a major player in the south-south flow story – which also includes the Middle East – that is gathering steam. Scratch the surface, however, and it is clear that Chinese money seeks to exploit weakness. And it considers LatAm to be a similar play to Africa, where the record is quite checkered. If anything, say Chinese officials, the relative legal and linguistic homogeny of LatAm makes conquest all the easier. That is not to say all is asset stripping and environmental abuse. China also brings expertise and pledges to invest heavily in infrastructure to support its investment, creating a fringe benefit to those countries open to partnership. This is essential where ability to monetize mineral wealth depends on infrastructure, for example in Peru, which lacks sufficient port capacity to get product out to market. China also offers good terms to those savvy borrowers able to negotiate. The flow must be managed to ensure that value created through LatAm-China connections is shared equally across the chain. This includes making sure companies are valued properly, doing joint ventures instead of sales, and maintaining strategic ownership. It involves bridging the gulf between two very different mindsets, as well as finding common ground and discovering where the value actually lies. The mountains are high and the emperor is far away. It will be to Latin America’s long term benefit to ensure that this is not the ideal cover for China to seize the upper hand in what is being spun as a mutually beneficial relationship. EDITOR James Crombie ASSISTANT EDITOR Dan Shirai REPORTERS Ben Miller, Taina Rosa CONTRIBUTORS Jason Mitchell, Jonathan Roeder, John Rumsey ART DIRECTOR Rosa Matamoros-Sense COVER ILLUSTRATION Chris Weyant COMMERCIAL DIRECTOR James Norton DIRECTOR OF BUSINESS DEVELOPMENT Teresa Aguilar MANAGER, CARIBBEAN, PERU, BOLIVIA, ECUADOR Arielle Schrader MANAGER, MEXICO & LEGAL SERVICES Mark Hudson CARIBBEAN & VENEZUELA REPRESENTATIVE Matthew Perks T +1 718 260-8970 SENIOR EVENTS MANAGER Omar Suarez EDITORIAL DIRECTOR, CONFERENCES & SPECIAL PROJECTS Michael Brosgart EVENTS MARKETING MANAGER Alex Rubin GROUP MARKETING MANAGER Louis Cassetta CIRCULATION MARKETING MANAGER Patricia Arcic OFFICE MANAGER Teresa Romero ASSISTANT TO THE CEO Vicky Maqueira NETWORK ADMINISTRATOR Lukasz Przybyl LATINFINANCE BOARD OF DIRECTORS PRESIDENT Christopher Garnett DIRECTORS Stuart Allen, James Crombie, Colin Jones, Giuliana Moreyra CHIEF EXECUTIVE OFFICER & PUBLISHER Stuart Allen CHIEF OPERATING OFFICER Giuliana Moreyra M Telephone: +1 305 448-6593 Fax: +1 305 448-0718 E-mail: editorial@latinfinance.com www.latinfinance.com Subscriptions hotline: U.S. +1 800 437-9997 +1 212 224-3570 U.K. +44 (0) 870 906-2600 E-mail address: subscriptions@latinfinance.com Sweet Smell of Dollars When Hugo Chávez took the podium at the UN this year, he sniffed hope rather than diabolical sulfur. Amid the theatrical politicking and chumming up to the Obama administration, he also nosed the sweet scent of US dollars. TARP cash recipient Citi, which is partly owned by the US government, helped Chávez add a veneer of respectability to Venezuela’s $5 billion October bond sale that raised cheap funds by exploiting the black currency market. It satisfied pent-up demand for dollars and simultaneously reduced depreciation pressure on the Bolivar. The trade is not new: it has become an annual affair for Venezuela or its oil company, and the banks that do it typically get paid little beyond chunky league table credit. Sure enough, Citi – which has been at pains all year to prove that it is still a major bond house, despite trouble at the parent – shot to the top of the charts on the Venezuela credit. For all his denunciations of capitalism, the Venezuelan president has always been a sharp local markets player. Roping in Citi this time was a stroke of financial genius. LF Subscriptions: one year magazine only $495. Premium subscriptions $2,499 Send subscription orders to: LatinFinance, 2600 Douglas Road, Suite 410, Coral Gables, FL 33134 USA T 305-448-6593, F 305-448-0718. Copyright© 2009 Latin American Financial Publications, Inc. is owned by Ell Holdings, Inc. All rights reserved. Reproduction in whole or in part of any text, photograph, or illustration without written permission from the publisher is strictly prohibited. Title is protected through a trademark registration with the US Patent Office. Indexed in Information Access Company. 2 L ATIN F INANCE November/December 2009
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Latin Finance - November/December 2009

Table of Contents for the Digital Edition of Latin Finance - November/December 2009

Latin Finance - November/December 2009
Contents
Latam-China Flows
Petrobras Interview
Best Boutiques
Banks of the Year 2009
Itau Unibanco Interview
Mexico: How to Capitalize on Crisis
Colombia: Local Shop Repels Foreign Pretenders
Chile: Pefecting the Art of Retail
El Salvador: A Foreign-owned Bank Dominates
Infrastructure & Energy Awards
Private Equity Fundraising
Latin Finance - November/December 2009 - Latin Finance - November/December 2009
Latin Finance - November/December 2009 - Cover2
Latin Finance - November/December 2009 - Contents
Latin Finance - November/December 2009 - 2
Latin Finance - November/December 2009 - 3
Latin Finance - November/December 2009 - 4
Latin Finance - November/December 2009 - 5
Latin Finance - November/December 2009 - 6
Latin Finance - November/December 2009 - 7
Latin Finance - November/December 2009 - 8
Latin Finance - November/December 2009 - 9
Latin Finance - November/December 2009 - 10
Latin Finance - November/December 2009 - 11
Latin Finance - November/December 2009 - 12
Latin Finance - November/December 2009 - 13
Latin Finance - November/December 2009 - 14
Latin Finance - November/December 2009 - 15
Latin Finance - November/December 2009 - 16
Latin Finance - November/December 2009 - 17
Latin Finance - November/December 2009 - Latam-China Flows
Latin Finance - November/December 2009 - 19
Latin Finance - November/December 2009 - 20
Latin Finance - November/December 2009 - 21
Latin Finance - November/December 2009 - 22
Latin Finance - November/December 2009 - 23
Latin Finance - November/December 2009 - Petrobras Interview
Latin Finance - November/December 2009 - 25
Latin Finance - November/December 2009 - 26
Latin Finance - November/December 2009 - 27
Latin Finance - November/December 2009 - Best Boutiques
Latin Finance - November/December 2009 - 29
Latin Finance - November/December 2009 - 30
Latin Finance - November/December 2009 - 31
Latin Finance - November/December 2009 - Banks of the Year 2009
Latin Finance - November/December 2009 - 33
Latin Finance - November/December 2009 - 34
Latin Finance - November/December 2009 - Mexico: How to Capitalize on Crisis
Latin Finance - November/December 2009 - 36
Latin Finance - November/December 2009 - 37
Latin Finance - November/December 2009 - 38
Latin Finance - November/December 2009 - Colombia: Local Shop Repels Foreign Pretenders
Latin Finance - November/December 2009 - Chile: Pefecting the Art of Retail
Latin Finance - November/December 2009 - 41
Latin Finance - November/December 2009 - 42
Latin Finance - November/December 2009 - El Salvador: A Foreign-owned Bank Dominates
Latin Finance - November/December 2009 - 44
Latin Finance - November/December 2009 - 45
Latin Finance - November/December 2009 - 46
Latin Finance - November/December 2009 - 47
Latin Finance - November/December 2009 - 48
Latin Finance - November/December 2009 - 49
Latin Finance - November/December 2009 - Infrastructure & Energy Awards
Latin Finance - November/December 2009 - 51
Latin Finance - November/December 2009 - 52
Latin Finance - November/December 2009 - 53
Latin Finance - November/December 2009 - 54
Latin Finance - November/December 2009 - Private Equity Fundraising
Latin Finance - November/December 2009 - 56
Latin Finance - November/December 2009 - Cover3
Latin Finance - November/December 2009 - Cover4
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