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JPMorgan banker sees Brazil firms borrowing for longer
October 8, 2013 / 1:51 PM / 4 years ago

JPMorgan banker sees Brazil firms borrowing for longer

SAO PAULO (Reuters) - Brazilian companies will have a more diversified base of funding in coming years, with longer maturities and different structures, that will benefit firms with a focus on infrastructure and other capital-intensive activities, the head of JPMorgan Chase & Co’s unit in the country said on Tuesday.

Fundraising patterns within a few years will be very different from now, with longer maturities making the chief difference, Jose Berenguer, JPMorgan’s senior country officer in Brazil, said at an event sponsored by Brazil’s banking lobby group Febraban.

An improved mix of funding should help companies with a focus on infrastructure investments, because money for those activities is needed for longer periods.

Currently, a small part of the banking system’s loan book goes to fund the construction of dams, ports and roads - with state development bank BNDES assuming a bigger part of that lending segment in Latin America’s largest economy.

Brazil’s government is currently pushing to create an attractive environment for infrastructure spending in the country, whose economy has struggled over the past three years. The government expects $90 billion in annual investments through 2017 to help Brazil overcome soaring logistics costs and overheads for farmers and exporters.

“I see a trend in which maturities, conditions will be different five or six years from now,” Berenguer said at the event.

Berenguer also said that a political impasse between Republicans and Democrats that led to a U.S. government shutdown in recent days could have devastating consequences for the global economy if it translates into a debt default. The impasse is probably going to be resolved at the very last minute, Berenguer noted.

If the U.S. defaulted, it would be just a for very short time, he added.

Reporting by Guillermo Parra-Bernal; Editing by Theodore d'Afflisio

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