Multinationals boast many competitive advantages from scale to talent to cheap cost of capital. So why are they so shy about leveraging their financing strength in emerging markets like Latin America? They would be smart to review the playbook of multilatinas, starting with Carlos Slim’s empire. Even with the U.S. corporate sector swimming in cash today, U.S. CFOs are loath to extend credit to customers in emerging markets, and, even less logically, make money off their cash starved suppliers in emerging markets. U.S. companies not only borrow money at lower rates than their similarly sized Latin American counterparts, U.S. companies can rotate their capital 8-12 times per year more than Latin American corporates. All but the largest Latin American firms […]
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