Latin American

1

Latin American Syndicated Loan Market Conditions
2
Overview of Latin American Bank Loan Market

• During early 2005, a combination of abundant
  liquidity and attractive rates continue to drive
  Latin American - including Argentina, Brazil,
  Chile, Colombia, Mexico, Peru, and Venezuela -
  borrowings.
• 7.9 billion of loan volume in 1Q 2005 compared
  to 8.8 billion in 4Q 2004
• 1Q is typically slower with issuances
  traditionally increasing during 2Q
• During 2004, the Latin American loan volume(1)
  experienced a 2.9 increase over 2003 reaching
  nearly 22.7 billion and a 17.0 increase over
  2002 at 19.4 billion.
• Over the past three years, Mexico, Chile, Brazil
  and Argentina have contributed the largest total
  loan volumes
• (US, in billions) 2002 2003 2004
• Mexico 7.99 12.57 11.39
• Chile 1.71 4.29 6.11
• Brazil 4.42 3.43 4.38
• Argentina 2.60 1.32 0.19
• Total 16.72 21.61 22.07
• of Total Loan Volume(1) 86.2 98.0 97.3

Top four Latin American loan markets have
experienced fluctuating loan volumes
(1) Based on Argentina, Brazil, Chile, Colombia,
Mexico, Peru, and Venezuela volumes. Source
Loan Pricing Corp.
3
Overview of Latin American Bank Loan Market

• The Latin American syndicated loan market is
  generally segmented into five categories (i)
  Banking / Finance, (ii) Electricity, (iii)
  Industrial, (iv) Media / Telecom, and (v) Mining.
• During 2004, the Industrial and Media / Telecom
  segments accounted for the largest increases in
  Latin America loan volume
• (US, in billions) 2002 2003 2004
• Banking/Finance 2.45 3.11 1.31
• Electricity 2.35 3.38 2.23
• Industrial 4.53 3.92 6.22
• Media/Telecom 3.33 1.04 7.00
• Mining 0.80 2.20 2.09
• Total 13.46 13.65 18.85
• During 2004, the overall Latin American industry
  segments tapped the market for inexpensive cash
  driven by investor demand and lower pricing.

Loan volume was dominated by an interest trimming
refinancing spree
Source Loan Pricing Corp.
4

Syndicated Loan Market Conditions - Mexico -
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Overview of Mexican Bank Loan Market

• During 1Q 2005, Mexico remained in the 1
  position of Latin American nations issuing a
  total of 5.5 billion in debt.
• Through the first three quarters of 2004, Mexican
  companies borrowed 9.3 billion
• During 2004, the Mexican loan market volume
  experienced a 9.4 decrease over the prior year
  falling nearly 1.2 billion to 11.4 billion.
• The decline negatively compares to the 57.3
  increase in loan volumes from 2002 (8.0 billion)
  to 2003 (12.6 billion).
• Industrial sector volume decreased 0.8 billion
  to 3.6 billion from 4.4 billion in 2003
• Media / Telecom sector volume increased 5.1
  billion to 5.6 billion from 0.5 billion in 2003
• Oil Gas, Banking / Finance, and Electricity
  sectors all experienced loan volume decreases
• During 2004, low demand for capital expenditures
  focused Mexican borrowers on refinancings and
  amendments.

Lenders have a desire to book quality assets in a
slower market with a combination of strong
credit structures attractive credit profiles
Source Loan Pricing Corp.
6

Syndicated Loan Market Conditions - Chile -
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Overview of Chilean Bank Loan Market

• During 1Q 2005, Chilean loan volume slowed by
  generating only 379 million with three new
  transactions.
• During 2004, Chile maintained the 2 position of
  Latin American nations and experienced
  significant volume increases driven by a
  refinancing binge.
• During 2004, the Chilean loan market volume
  experienced a 42.4 increase over the prior year
  exceeding nearly 6.1 billion compared to 4.3
  billion during 2003.
• Increasing loan volume driven by 0.7 billion
  increase in Industrial sector to 1.7 billion
  from 1.0 billion and increase among all sectors
  except Electricity
• Chiles Compania de Telecomunicaciones de Chile,
  refinanced its credit facility two times during
  2004 (reducing pricing to LIBOR 0.40) and has
  tapped the market during early 2005 for another
  refinancing venture.
• During 2004, Chilean borrowers were hands down
  the most aggressive price cutters during 2004.

Chile borrower are not expected to be incredibly
active during 2005
Source Loan Pricing Corp.
8

Syndicated Loan Market Conditions - Brazil -
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Overview of Brazilian Bank Loan Market

• During 2005, Brazilian companies are on pace to
  exceed borrowing output of each of the previous
  two years.
• Based on 1.5 billion during 1Q 2005, annualized
  loan volumes total 6.0 billion representing a
  36.4 increase over 2004.
• Market players are optimistic that Brazil will be
  one of the major sources of new activity.
• During 2004, Brazil maintained the 3 position of
  Latin American nations.
• During 2004, Brazilian companies remained flush
  with liquidity and focused on the
  interest-shaving refinancing possibilities.
• During 2004, the Brazilian loan market volume
  experienced a 27.7 increase over the prior year
  reaching nearly 4.4 billion compared to 3.4
  billion during 2003.
• Brazils largest deal was courtesy of Tele Norte
  Leste Participacoes S.A. 814 million debt
  refinancing in August 2004.

The pool of banks has grown for Brazilian
companies
Source Loan Pricing Corp.
10

Syndicated Loan Market Conditions - Argentina -
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Overview of Argentinean Bank Loan Market

• During early 2005, Argentina has yet to
  experience the increase in deal flow as
  projected.
• Transactions have not materialized for companies
  that were stable during the crisis and whose
  business is export-oriented.
• During 2004, Argentinean loan volume declined for
  the third consecutive year to 0.2 billion and
  down from 2.6 billion in 2002.
• The Argentinean loan market is primary segmented
  into four sectors including (i) Banking /
  Finance, (ii) Electricity, (iii) Industrial, and
  (iv) Telecom / Media.
• The Industrial sector remains the countrys sole
  provider of syndicated loan volumes.
• Banking / Finance has experienced the most
  significant decline in loan volume from a high of
  1.2 billion in 2002.

Argentina continues to experience the effects of
historical financial crisis
Source Loan Pricing Corp.