Recently, there has been an increase in total volumes for Latin American bonds. Brazil is the largest issuer in terms of deals and volumes with 45%. Mexico is also considered very strong with an improving economy which is leading to higher demand for its bonds. Mexico has been decreasing the amount of sovereign bonds as funding needs have diminished. In a low interest rate environment and higher coupon rates for emerging market debt, these factors are contributing to the higher demand for Latin American bonds. It is extremely difficult to find high yield bonds in developed countries leading investors to explore other avenues. Excel released an IPO of the “Latin American Bond Fund” on June 19th 2012. Since its debut on the TSX it has been trading above its original price of $10. As of Oct 12, 2012 it’s trading at $11.48. The ticker symbol is ELA.UN and is a great way to earn higher yield with quarterly distributions. Clients are looking for new opportunities from investments to earn income and grow their portfolios. This product is also a great way to help clients diversify their portfolios.
Written by Jeff K.
Dwyer, R. (2012, October). Euromoney. Latin American Issuers attract record crowds. Retrieved October 15, 2012, from http://www.euromoney.com/Article/3098999/CurrentIssue/86809/DCM-Latin-American-issuers-attract-record-crowds.html