2009年-世界发展银行全球_Patterns_of_Financing_During_Periods_of_High_Risk_Aversion___How_Have_Latin_Firms_Fared_in_this_Crisis_So_Far__8页_700kb

Summary of "Patterns of Financing During Periods of High Risk Aversion: How Have Latin American Firms Fared in This Crisis So Far?"

Core Content

This document analyzes the financing patterns of Latin American firms and governments during the 2008 global financial crisis, focusing on their access to both domestic and international capital markets.

Main Points

• Access to International Capital Markets:

  • Since the start of the financial crisis, private sector firms in Latin America (LAC-7 countries) have faced a significant decline in access to foreign capital markets.
  • In the aftermath of the Lehman Brothers' collapse, only government-owned firms and governments themselves could re-enter international markets and raise capital.
  • The total amount of capital raised by firms and governments in Latin America fell by around 58% compared to the same period in 2007-08.
  • In foreign markets, the share of capital raised by governments or government-owned firms increased dramatically, reaching over 50% in December 2008 and nearly 66% in January 2009.
  • The role of government guarantees in attracting foreign investors became evident during this period of high risk aversion.

• Syndicated Loan Markets:

  • Despite the decline in international capital markets, the syndicated loan market remained a viable option for the private sector in Latin America.
  • The amount of capital raised through syndicated loans dropped by 89% in 2009 compared to 2007-08, yet they still accounted for most of the new issues during the crisis.
  • The private sector was able to meet its rollover needs in these markets, with over 97% of the new capital raised in local or syndicated loan markets.

• Domestic Capital Markets:

  • Domestic capital markets also saw a significant decline in capital raising activity, with an average monthly amount of $5.5-$5.6 billion in 2007-08 dropping to $2.5 billion in 2009.
  • The role of government guarantees in attracting local investors was less pronounced compared to foreign markets.
  • Government-owned firms accounted for less than 15% of the total capital raised in domestic markets, similar to the previous year.
  • Despite the decline, capital raising activity remained distributed across multiple countries, with Brazil and Mexico accounting for the largest shares.

• Comparison with Other Emerging Markets:

  • Similar trends were observed in Eastern Europe and Southeast Asia, where access to foreign capital markets was severely restricted.
  • In these regions, government guarantees played a more significant role in attracting local investors.
  • In Southeast Asia, government-owned firms accounted for 44% of all new issues in domestic markets after October 2008, compared to less than 25% in 2008.
  • In Eastern Europe, government-owned firms represented 80% of all new issues in domestic markets after October 2008, compared to 20% in the first nine months of 2008.

Key Information

• Private Sector Impact:

  • The private sector in Latin America faced a severe credit crunch in October 2008.
  • However, it was able to meet its rollover needs from November 2008 onwards, primarily through local and syndicated loan markets.
  • The number of firms issuing new capital remained comparable to historical averages, indicating that access to local financing was not completely disrupted.

• Government Role:

  • Governments and government-owned firms were the primary sources of capital in both foreign and domestic markets during the crisis.
  • The reliance on government guarantees was more pronounced in foreign markets than in domestic ones.
  • In Eastern Europe and Southeast Asia, government guarantees played a more critical role in attracting local investors.

• Market Trends:

  • The total amount of new capital raised in Latin America dropped from $201.7 billion in the first three quarters of 2008 to around $11 billion per month in 2009.
  • In foreign markets, the share of capital raised by the public sector increased from less than 15% in 2008 to over 50% in December 2008.
  • In domestic markets, the share of capital raised by government-owned firms remained relatively low, at less than 15%, but the distribution of capital raising activity across countries was still relatively broad.

Conclusion

The financial crisis severely impacted access to international capital markets for Latin American firms, leading to a reliance on domestic and syndicated loan markets. Government guarantees played a crucial role in enabling public and government-owned firms to raise capital abroad, especially during periods of high risk aversion. In contrast, the role of government guarantees in attracting local investors was less significant in Latin America compared to Eastern Europe and Southeast Asia. The private sector in Latin America was able to meet its financing needs through local markets, suggesting that while foreign capital was scarce, domestic financing remained a viable option.