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The 2014 Latin America Research Team: Corporate Debt, No. 3: Alexandre Müller & team
Total appearances: 5
Team debut: 2010
For a second straight year, the BTG Pactual trio captained byAlexandre Müllerclaims third place. Müller, who works out of São Paulo and also directs theNo. 3 squad in Local-Markets Strategy, counsels that the specter of a potential rise in U.S. interest rates is among the critical issues for the region’s credit markets. “Once Treasury rates move higher, foreign exchange rates for Latin American countries are expected to depreciate,” he explains, “making higher the value of dollar-denominated liabilities for companies and reducing the liquidity of international capital markets.” Accordingly, the strategists predict that regional corporates will refinance short-term maturities ahead of rate increases in the U.S. They are advising clients to overweight investment-grade bonds rather than high-yield credits, believing that companies are unlikely to post earnings surprises in the challenging macroeconomic environment. Favorites include several Brazilian issues: energy giant Petróleo Brasileiro’s 5.75 percent bonds due in 2020; the perpetual bonds of Odebrecht Finance, a Cayman Islands–based subsidiary of construction and engineering conglomerate Odebrecht, and BR Malls Participações, which operates shopping centers; and the 2019 and 2020 credits of banking services provider Banco BMG. The 2022 bonds of Peruvian miner Volcan Cía. Minera also are recommended. BTG’s São Paulo– and Santiago-based team earns praise for producing reports that are “accurate and timely,” as one fund manager puts it.