Capital Flows to Latin America and the Caribbean by Helvia Velloso published by ECLAC (3/106).
Asset prices declined and portfolio flows to Latin America and the Caribbean (LAC) weakened in 2015. Bond issuance in 2015 amounted to US$ 80 billion and was 40% lower than in 2014. This was the lowest annual issuance since 2009. The absence of Brazilian borrowers from international capital markets explains about half of this decline. The total amount issued by Brazilian issuers fell by 84%, from US$ 45.4 billion in 2014 to US$ 7.2 billion in 2015. While LAC bond issuance declined in 2015, bond spreads widened, as a sharp decline in oil prices, doubts about China’s economic health, and anticipation of a U.S. interest rate increase, weighed on risk. The J.P.Morgan EMBI Global Latin Component widened by almost 100 basis points in 2015.
This report provides an overview of Latin America and Caribbean’s access to the cross-border debt markets in 2015. The main developments of the year will be described through charts and tables, revealing the lowest annual issuance since 2009, higher spreads than in the previous year and a trend towards lower credit ratings.
