Making Sense A deep dive into financing in Latin America
Jul 25, 2025
In this conversation, Lisandro Miguens, Managing Director at JPMorgan and head of Latin America Debt Capital Markets, shares his expertise on the funding dynamics of Latin America. He discusses how the region's capital markets compare to the U.S., uncovering unique opportunities for borrowers. Lisandro highlights the roles of sovereign versus corporate financing and analyzes the bond and loan market dynamics. His insights reveal why now could be the best time for investors to consider Latin America amidst evolving global economic conditions.
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Latin America's Capital Markets Duality
- Latin America's debt capital markets blend local currency issuances and international bonds dominated by firms like J.P. Morgan.
- Local markets are twice the size of international ones, accounting for 70% of financing, with unique idiosyncratic risks beyond US interest rates.
Sovereign and Corporate Bond Mix
- Latin American international bond markets have a significant sovereign presence but 40% corporate participation.
- Some companies with investment-grade profiles are rated high-yield solely due to their country's rating.
Hybrid Bonds as Quasi-Equity
- Hybrid bonds in Latin America are deeply subordinated perpetual debt with discretionary coupon payments.
- They act as quasi-equity cushions for companies facing cyclical revenue lows, especially in commodities.