Amerant CIO bullish on Latin America debt

Core Insights - Investor sentiment towards Latin American debt markets is shifting positively due to recent US-led intervention in Venezuela, leading to a constructive reaction in credit markets [1] - Venezuelan sovereign and corporate debt have rallied on expectations of potential restructuring, while the broader Latin American credit complex has tightened in sympathy [1] - Markets are pricing in optimism around renewed US strategic interest in the region and the possibility of stronger trade ties [1] Market Dynamics - Venezuela accounts for less than 1% of global oil production, limiting immediate global supply impacts despite geopolitical tensions [1] - Rehabilitation of Venezuelan oil infrastructure could increase production over time, but the short-term effect on global markets remains minimal [1] - Higher oil prices have provided support to energy producers in countries such as Colombia [1] Regional Considerations - Idiosyncratic pressures are noted in Brazil, while Mexican corporates may experience volatility ahead of USMCA renegotiations [1] - The baseline expectation is that an agreement will ultimately be reached regarding USMCA [1] Investment Strategy - Amerant Investments emphasizes a disciplined investment approach focused on fundamentals and analysis of each specific company [1] - Spreads in Latin America are considered wide due to geopolitical fears, but investors are being compensated for that risk [1] - The overall outlook on Latin America is positive at this time [1]