Investors Race to Purchase Latin Bonds --- Signs of Regional Rebound, Mexican Bond Payment Lift Lenders' Confidence
CARACAS, Venezuela -- Just after the Mexican currency crisis broke in late 1994, Latin American borrowers had trouble finding anyone to lend them money even for a month or two.</br></br>Now investors are scrambling to buy billions of dollars of Latin corporate bonds, some of which won't come due for 100 years. They are betting the region will snap out of a wave of recessions that have plagued it since the currency crisis. These lenders are counting on economic growth that will make it easy for companies to offer billions of dollars of new debt.</br></br>Mexico's payment last week of the last part of its $13.5 billion emergency loan from the U.S. is likely to boost investor confidence in the region even more.</br></br>Last Friday U.S. pension funds, mutual funds and insurance companies, among others, snapped up an eye-popping $650 million bond offering from Empresa Nacional de Electricidad SA, or Endesa, Chile's largest electric utility. The bond sale included $200 million of 100-year bonds, the first from Latin America. Demand was so strong for the investment-grade offering that it was increased from an original size of $580 million, says Bill Rogers, a vice president of debt capital markets at Chase Securities Inc., a subsidiary of Chase Manhattan Corp.</br></br>The Endesa offering is just the latest sign of investor eagerness to lend to Latin companies, which sold a record $19 billion of bonds last year, according to IFR Securities Data Co.