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A power surge for Latin America deal-making

Matthew Toole
Matthew Toole
Director, Deals Intelligence

The energy and power industry sustained Latin America deal-making in Q3. Charts from Refinitiv Deals Intelligence examine the latest investment banking trends in LatAm equity and debt capital markets, including a drop in IPO and M&A activity.

  1. Latin America deal-making trends show a 53 percent rise in equity capital market issuance in the first three quarters of 2019, with power company Enel Americas the biggest issuer.
  2. IPO activity in Latin America fell rapidly from 2018 figures to one-tenth of overall equity issuance, raising just US$2.6 billion in the period.
  3. Latin America debt capital market activity increased 22 percent from 2018 figures, with Mexico the largest debt issuer by country.

Deal-making in the energy and power industry helped Latin American investment banking fees, although fees are 6.2 percent down on YTD 2018 to US$1.7 billion, in the first nine months of 2019.

LatAm equity and equity-related issuance totalled US$24.7 billion so far during 2019, a 53 percent increase year-on-year to the highest level since YTD 2013.

However, overall ECM fee-take remained flat on last year.

Latin America deal-making in Q3

Electrical power company Enel Americas was the largest equity issuer to the end of Q3, raising US$3 billion in follow-on finance.

As a proportion of overall equity issuance, initial public offerings fell from 50 percent to just one-tenth of the market, with newly listed businesses raising just $2.6 billion in the period.

LatAm - Equity capital markets. A power surge for Latin America deal-making

Energy and power was also the most active M&A target sector, accounting for one-third of the market. This wasn’t enough to stop overall corporate acquisition activity in the region falling 35 percent to $62.1 billion – a four-year low.

LatAm - Top fee paying industries. A power surge for Latin America deal-making

Fee income from M&A has fallen 26 percent since the same period last year, to $456 million. Citi is currently the lead adviser on M&A with any Latin American involvement, followed by Morgan Stanley and Bank of America Merrill Lynch.

Debt capital markets activity

Overall debt capital market activity in Latin America increased 22 percent to raise $116 billion, driven by a rise in investment grade corporate issuance.

Mexico is the largest debt issuer by country, with $32 billion raised so far, followed by Brazil and Chile. The largest single raise was by PEMEX, the world’s most indebted oil company.

LatAm - Debt capital markets. A power surge for Latin America deal-making

Visit Refinitiv Deals Intelligence for more insight on the deal trends in Latin American investment banking.

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