Latin American Corporate Liquidity: Waiting for Springtime

Fitch Ratings discusses the corporate credit environment throughout Latin America.

Monday, November 10, 2008


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As can be seen in the charts on the following two pages, Latin American corporates have made tremendous improvements in their liquidity positions since the end of 2003 due to vibrant local capital markets, strong cash flow generation and significant deleveraging. The improvements have been broad-based, occurring within each market and across each issuer default rating (IDR) category. The charts also reveal a sharp downturn in the funds from operations (FFO) growth rate during the last twelve months (LTM) ended June 30, 2008, and a reduction in cash as a percentage of short-term debt.
The downturn in FFO, plus dormant bank and local capital markets, will test the
solvency of several of the 263 Latin America corporates covered by this special report in the months ahead.

More on this topic

Sources of Capital for Business

May 2009

Bank credit tightening makes it necessary to look for alternate private capital financing sources.

In the Elfinancierocr.com blog article "En numerous," Edgar Delgado Montoya outlined five options as a source of financing for both start ups and business expansion projects: Emerge Fund, Link Investment Caseif II, E + Co LAC, and E3 Corp.

Guatemala: Corporate Interest Rates Down

March 2011

The average interest rate charged by banks to corporate customers has fallen more than 10% over the last 2 years.

In December 2008, the average rate for corporate loans over $ 650.000 was about 9.72%, dropping to 8.55% in February 2011.

Luis Lara, CEO of Industrial Bank, stated that they have not seen such low rates in the country for a long time, which is good because "it allows for meaningful projects to get done."

Guatemalan Banks Reduce Interest Rates for Companies

August 2011

In recent months the banking system has reduced interest rates on loans to large corporations.

In March 2009, the average interest rate on loans over $650,000, stood at 9.75%, changing to 9.29% in December 2010 and in March of this year is was 8.43%, showing a downward trend.

Costa Rica: Business Credit Falls

July 2015

The drop from 20% to 6% in the annual growth rate of bank lending to companies as of June, illustrates the direct link between confidence in the future and demand for business loans.

Cathay Bank estimates that slower growth in bank loans for business activities is due to the uncertainty regarding the near future of the economy.

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