Where should companies go for corporate financing this year? As far as Latin America is concerned, stocks, bonds, loans--even exotic ideas, like mortgaging assets through the stock market--have proven effective.

In Brazil, the stock market is back in business. After a four-year hiatus, initial public offerings have returned as a boom in exports of commodities pumps up the economy. In Mexico, exports of manufactured goods are picking up now that the neighboring U.S. economy is moving again.

There is more money to go around, too. in Chile and Mexico, retirement funds are injecting enough into the capital markets that some companies can forgo financing abroad. That's wise, considering that foreign interest rates should rise this year. Dollar-denominated debts and rising interest rates can make for a nasty cocktail in Latin America.

In Argentina, Ecuador and Venezuela, companies are getting on their feet again. In Peru, pension funds are directly financing development projects for equity stakes, a first there. Across the region, banks are giving companies record-long time to pay back their bonds.

Confidence in the region is so high that international investors are again willing to take on exchange-rate risks by buying sovereign and corporate bonds denominated in domestic currencies. Whether this bonanza will continue or has already passed by remains to be seen. The fundamentals in most countries are historically stronger than ever, which should make for a soft landing if economies cool.

P.S. Banco Santander's CEO for Latin America Francisco Luzon has some good things to say about the region, and not just for big businesses. He's looking to grow by loaning more to small enterprises. (Page 7)

PAY DAY

PHOTO: PAUL HILTON/EPA

Forrest ]ones

fjones@latintrade.com

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