LatAm Loans

The slew of syndicated loans being re-priced, pulled and slashed across Asia is a sign that rising funding costs are hurting the region’s lenders — and borrowers. Unfortunately this is just the start of things to come.

Greg Fleming, president and COO of Merrill Lynch, is proud of the firm’s record at avoiding some of the worst excesses of bull market leveraged lending. He tells EuroWeek’s Toby Fildes that Merrill pushed itself from 12th to 5th in leveraged finance without squandering its balance sheet. Now that the market has soured, the last thing he wants to do is sell good positions to hedge funds at deeply distressed prices.

WORLDWIDE mergers and acquisitions activity fell to its lowest level for four years in the first quarter of this year, according to Dealogic.

THE $50bn syndicated loan for Brazilian miner Vale (formerly CVRD) has been cancelled, following the collapse of talks between the borrower and Xstrata, its Anglo-Swiss rival and bid-target.

It could have been the start of a stellar year for the Latin American loan market. Only 12 months ago, it certainly would have been. Were it not for the fact that the market is now prey to the worries about underwritings, structures and pricing felt in other emerging loan markets since the onset of the credit crunch in mid-2007 — and this is no small caveat — Latin America’s loan market would have been on peak form this year.

Atiq-Ur Rehman, Citigroup’s co-head of global loans, leveraged and emerging markets finance, tells Toby Fildes why he believes the LBO market will recover.