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Busy borrowing
29 July 2011
Current volumes in Latin project finance are higher than post-crisis lows, but are still below their pre-crisis peak. By Jared Brenner, Maria Rosa Garcia Otero, and Fuensanta Diaz Cobacho, WestLB.
Although most of the major Latin American economies avoided the worst impact of the global economic crisis, the turmoil in the worlds financial markets and the reluctance of investors to commit capital to new ventures led to the same sharp falls in both general and project loan volumes in the region as elsewhere.
With several countries experiencing growth rates that rival those of China, a pent-up demand for energy and new infrastructure has led to a spike in project development and a return of dealflow, if not to pre-crisis levels, then certainly to more respectable levels. By our estimation, the current project finance deal pipeline for 2011 is in excess of $16 billion.
The slow recovery in 2010
Like markets worldwide, the Latin American debt market started to pick itelf up off an unprecedented low in 2009, recovering to a total deal volume of about $20.4 billion from a disastrous...
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