Welcome to the Andean Community Investment Forum
Latin American M&A activity had a strong start to the year, with total deal value reaching USD 46.3bn in 1H18, up 61% on the same period in 2017, according to Mergermarket data. First-half 2018 deal volume is nearly identical to 1H17 with the former registering one less transaction. Countries embodying the Andean Community trade bloc, including associate member Chile, demonstrated poise once again as member nations are on pace to match totals from 2017 while accounting for 28% and 29% of all Latin American 1H18 M&A activity in volume and value, respectively.
Volatility has struck macroeconomic fundamentals as FX markets and interest rates have swung in an unfavorable direction for many Latin American markets. While underlying economics may give M&A investors jitters, distressed debt players are getting ready to pounce as they keep an eye on corporates in Colombia, Chile and Peru. In a recent Debtwire report that tracks bond pricing throughout Latin America, among the top 20 decliners, 11 of those credits are domiciled in the Andean region.
While investors of any stripe should be able to continue to unearth opportunities along the Pacific Coast, risks and uncertainty, as always, line the shore as elections, legislative reform, social unrest and technological disruption will pose challenges and opportunities.
Please join the Mergermarket and Debtwire teams and esteemed panelists in exploring the risks and growing opportunities across the Andean union.
Registration and Coffee
Surveying Sector Opportunities Along The Andean Chain
The consolidated EMU sector had the highest deal value of any in Latin America for five years in a row (2013-17) in which Andean Community members and Chile represented 23% of this activity in 2017. Dealmakers can expect the Andean's share to dramatically climb, as much as 60 – 70%, which was achieved in 2014-15, if copper and other commodity prices shoot upward. Yet, while energy and mining, it seems most of the time, are synonymous with industry in Latin America, investors around the globe would be mistaken to overlook investment and M&A opportunities elsewhere. Based on Mergermarket data, notable sectors include consumer, financial services, industrial & chemical, TMT and business services.
Listen to panelists discuss EMU trends, risks and investment opportunities among the Andean Community nations
- Will several Andean nations' overlapping membership in the Pacific Alliance trade bloc act as a counterweight to Brazilian M&A activity? What opportunities will emerge from such competition?
- What energy and power infrastructure needs will drive dealmaking?
- Examining if Bolivia and Ecuador will provide lucrative energy and mining opportunities over next 12 months?
- "Chilecon Valley" opportunities – exploring viable entrepreneurial businesses in capital starved Santiago.
- What does the future hold for those member countries that just experienced elections? What reforms are on the way?
- Measuring impact and influence from foreign investors with special focus on Canadian, Mexican and Chinese firms.
Coffee Networking Break
Macroeconomic Headwinds Gust Through Colombia & Andean Region
The corporate default rate remains at a historic low in Latin America. Yet, savvy investors have not become complacent because the fallout from last summer’s emerging market meltdown is still playing out in Latin America. The incessant appreciation in the US dollar and rising rates, both of which have sent dollar-denominated liabilities skyrocketing, may present opportunities for distressed debt investors. Will a corporate default conflageration ensue if long-term investors dump fixed-rate bonds en masse, putting additional upward pressure on rates?
Zooming in on Colombia, concessionaires and other stakeholders who are working on the national 4G program (greenfield highways) could face difficulties if macroeconomic fundamentals further deteriorate. In such a scenario, highly levered projects and construction firms could find themselves in the crosshairs of distressed debt investors.
Delegates will have an opportunity to hear panelists discuss the distressed corporate environment and recent high-profile restructuring developments.
- What sectors and/or companies could fall within distress over the next year or so in Colombia and greater Andean region?
- How are Colombian and other Andean-based companies bracing for economic headwinds?
- Outlook on debt opportunities in private placements, loans and project bonds that are being used to financing Colombia’s critical infrastructure projects.
- What Andean nations are vulnerable to additional macroeconomic volatility and what could the fallout look like?
- Assessment of recent corporate restructuring developments in and out of court.