Magazine article American Banker

Morgan Leads First Latin Issue in Euros, $165M in Argentina

Magazine article American Banker

Morgan Leads First Latin Issue in Euros, $165M in Argentina

Article excerpt

J.P. Morgan & Co. has arranged the first Latin American corporate bond denominated in euros: a $165 million, five-year issue for Telecom Argentina STET France.

The issue by the Argentine telephone company was increased to $165 million, from $137.5 million, after it was oversubscribed.

Observers said the strong investor interest is a sign of renewed confidence in Latin America, which lost favor amid a massive devaluation in Brazil this year and sharp economic downturns in several nations. (See story on page 30.)

"Investors are starting to differentiate between credits and are less concerned about a blowout in Brazil having an effect elsewhere," said Alex Antebi, vice president for Latin American capital markets at J.P. Morgan.

Bankers also noted that as investors resume buying Latin American paper, yields are tumbling. According to Morgan's emerging market bond index, the average interest rate paid by an emerging market borrower has fallen from around 14% in January to less than 11%.

Friday's issue by Telecom Argentina comes on the heels of Thursday's successful $500 million bond issue by Panama and a $1 billion issue by Mexico underwritten by Morgan Stanley Dean Witter. The Panama issue was also underwritten by J.P. Morgan, together with Salomon Smith Barney, a unit of Citigroup Inc.

Panama is the fourth Latin American country to return to international bond markets since investors began fleeing Latin America in August after Russia's financial markets collapsed. …

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