Deals of the YEar awards
In 2022, when rising interest rates piled pressure on potential bond issuers to offer higher yields, many firms turned to the bank markets to fulfil their financing needs. A meaningful number of borrowers turned to J.P. Morgan to arrange their loans.
The Wall Street firm, which wins the award for Loan House of the Year, topped the revenue league tables for loans in Latin America, on both Refinitiv and Dealogic data, with the latter estimating net revenue earned at $39 million on deal volume representing some $5.6 billion.
“In 2022, all issuers were looking at all the options that they had in local markets and loan markets. They were tapping options away from bonds,” says Lisandro Miguens, managing director and head of Latin America debt capital markets at J.P. Morgan.
The bank had overhauled its debt capital markets strategy seven years ago, expanding its product offering to including restructurings, project finance, ESG, liability management and private credit – a fact which Miguens says gave the bank a strategic edge in a tough market.
“In the past few months, our complete product toolkit strategy has really paid off. When the market gets difficult, having a broader base of products allows you to be closer to your clients,” he says. “A bond house without a good balance sheet cannot offer bridge or syndicated loans and support clients in their times of need.”
One example of this expanded capability was evident in the Chapter 11 restructuring for Latam Airlines, in which J.P.Morgan provided part of the $2.75 billion funding to help it exit bankruptcy.
“To help Latam Airlines, we needed to have balance sheet, a very good combination of restructuring knowledge in the region and in the US, and the capacity to execute relying not only in emerging market accounts, but also in high yield hedge funds that are focused on the airline business,” Miguens says.
He believes the firm’s broad-based capability will keep paying off as organizations continue to assess alternatives to vanilla bonds to meet their financing needs in 2023, although bank markets may face challenges too.
“The loan market tends to be more resilient than the bond market, and also to react more slowly. In the last nine months, interest rates increased hugely in the bond market, but spread widening in the loan market was very mild. And several banks had liquidity dedicated to Latin America,” Miguens says. “Issuers tapped the loan market quite a bit, and there is some indigestion at this point. Let’s see what will happen in 2023.” LF