Tighter credit and lower commodities prices have pushed even the largest mining companies in Latin America back into the arms of the development finance community. Smaller operators have even fewer options. John Rumsey reports.
Latin American mining finance has witnessed a significant drop-off in commercial bank interest. Shorter tenors, higher pricing and the re-imposition of high debt service coverage ratios dominate the market. Export credit agencies are back in vogue and can anchor deals, but only those that are strategically important.
In this tight market, bankers like to point to the closing of large deals, though they are few and far between. The Minera Esperanza deal shows that with the right agency backing, large-scale project finance deals in the region are still viable, and can still bring in at least some commercial banks.
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