Latin Finance - May/June 2012 - 12

debt investor survey

that includes first-time issuers can result in information overload and greater complacency on both the buy side and sell side as market participants try to keep pace with market developments, Abad says. He notes a growing tendency for less experienced EM investors to take due diligence shortcuts for the sake of maintaining performance, while more experienced hands who have lived through various market cycles are more cautious. Double and single B rated transactions accounted for $7.03 billion, or 13.0%, of the total issuance in LatAm in the first quarter, compared to $11.05 billion in the first quarter of 2011, which represented 26.76% of the quarter’s total volume, according to Dealogic. Even if the lower-rated credits account for a smaller share than last year, their presence More selective: Antin is encouraging given the pessimism back to market,” says Eric Ollom, director expressed by so many late last year. of LatAm corporate credit strategy at Citi. “The big surprise of 2012 is how “The new issuance is one of the market quickly single B names were able to come

impacts coming from banks constraining their lending to the region. We saw high-yield names that couldn’t get deals done and then we saw brand new names like Cabcorp emerge. I do think there is appetite for interesting credits.” Ollom refers to Guatemala’s Central American Bottling Corporation, or Cabcorp, which sold a Ba2/BB/BB+ $200 million 2022 bond in February 2012, getting a 7.0% yield. Another successful debut came from asparagus and avocado exporter Camposol, which raised a $125 million B3/B bond at 10% yield in January. The trail is also full of high-yield issuers who didn’t make it, including BBDominican port operator Caucedo, and B3/B minus Brazilian sugar and ethanol company Grupo Farias. Abad says Western Asset prefers B and BB rated exposure to Latin American issuers, with an emphasis on upstream oil and gas producers in South America and select telecom and media operators in

Top EM Bond Performers
Strong Recent Performance Annualized Growth Return (%) Benchmark JP Morgan EMBI+ JP Morgan EMBI Global Diversified Lipper Emerging Market Debt Classification Average Manager GMO Kokusai Franklin Templeton Aberdeen Asset Management TCW Federated Nomura Columbia Stone Harbor Invesco Western Asset management JPMorgan
Source: Lipper

Launch

Fund Value ($m)

Allocation LatAm (%)

3 yr 15.99 16.21 18.67

5 yr 8.45 8.24 8.78 10.17 0.00 9.77 9.26 12.59 9.56 14.35 10.48 0.00 8.11 9.77 6.81

Fund Emerging Country Debt Fund Emerging Sovereign Open Emerg Markets Debt Opportunity Fund Select Emerging Markets Emerging Markets Income Fund Emerging Market Debt Fund Emerging Bond Fund Emerging Markets Bond Fund Emerging Markets Debt Fund Emerging Markets Bond Emerging Markets Debt Portfolio Emerging Markets Debt Fund 1998 2009 2006 2001 1998 1996 1996 2006 2007 2000 1996 1997 1117.40 284.64 448.30 850.78 2562.60 164.00 725.16 189.90 1121.20 408.00 121.40 229.20 42.71 36.30 24.20 38.43 31.30 47.74 37.79 42.55 41.49 39.58 44.25 48.83 29.59 24.47 24.27 23.70 23.52 23.25 23.08 22.74 21.62 21.52 21.44 21.36

12 LatinFinance

May/June 2012
Latin Finance - May/June 2012

Table of Contents for the Digital Edition of Latin Finance - May/June 2012
