Latin American and Caribbean (LAC) countries sold debt at a strong pace in the first half of 2017. Flows were driven by a search for higher returns than have been offered by developed bond markets, and encouraged by an improvement in economic conditions in the region, according to the report Capital Flows to Latin America and the Caribbean: Recent Developments, released by the Washington Office of the Economic Commission for Latin America and the Caribbean (ECLAC). Enthusiasm for LAC assets was supported by low interest rates across de globe and sustained weakness in the U.S. dollar.
With appetite for its assets rising and economic conditions improving, the total amount of debt issued by Latin America and the Caribbean in international markets in the first half of 2017 reached US$ 74 billion. The region’s strong international bond market performance was supported by a tightening in bond spreads, although the credit quality in the region continued to deteriorate: there were sixteen sovereign downgrades from January to July, and six upgrades.
