Cost-efficient funding sources for private equity in Latin America are now overwhelmingly local as the appreciating value of the US dollar makes cross-border finance difficult, agreed panellists speaking at Latin Lawyer's 6th Annual Private Equity Conference, which was held in September in New York.
The exchange value of the US dollar, which has appreciated 15 per cent this year, makes dollar-denominated financing an expensive funding option for the majority of private equity investors that obtain their revenues in local currency, agreed speakers in a panel moderated by Carlos Albarracín of Milbank, Tweed, Hadley & McCloy LLP. "People very rarely get financing in foreign currency unless it's a complete exporter or some company that has a lot of exposure to overseas sales," said Lior Pinsky, a partner at Brazil's Veirano Advogados.
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