- Flight to Safety – Uncertainty in local markets -- motivated by social unrest and political turmoil in some economies -- will increase the appetite of major local players to diversify with safer assets and directly invest in the U.S. and other developed, more stable economies, increasing work related to family offices and funds in areas such a real estate, consumable goods and services, using tax-efficient structures.
- Digital Banking Growth – The global digital banking trend will migrate further south into Latin America as investors develop a better understanding of this space and business model. The digital banking market has been rapidly expanding in Latin America and has seen significant investment in recent months, but more are on the way.
- More Liability Management Transactions – Given the ongoing economic environment, we will continue to see a significant amount of liability management transactions for companies with outstanding public debt, particularly those where liquidity has been adversely impacted by the continued pandemic. These transactions will include consent solicitations, tender offers and exchange offers, and may be accompanied by equity-related transactions such as rights offerings and private equity infusions.
- Environmental, Social and Governance (ESG) and Sustainable Finance – As ESG concerns continue to gain more priority on the corporate agenda in Latin America, more companies operating across the region will respond by adopting more environmentally and socially conscious business practices, including issuance of green, sustainability-linked and social bonds as well as carbon credit trading programs.
- More Special Purpose Acquisition Combinations (SPAC) – Investors and sponsors are likely to continue focusing their attention to the Latin American market in 2022, looking for companies offering quality investment values and high-growth opportunities. With a growing understanding of the SPAC product and the opportunities for going public in a non-traditional way, we will see likely more Latin American-sponsored SPACs as well as SPAC combinations with companies in the region.
About the Authors
Greenberg Traurig, LLP’s award-winning Latin America Practice draws on resources from our offices in Chicago, Houston, Los Angeles, Mexico City, Miami, New York, Washington D.C., and elsewhere around the world, bringing together a multidisciplinary team of more than 120 lawyers to help clients identify and capitalize on business opportunities in Latin America, the Iberian Peninsula, and the Caribbean.