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No. of Recommendations: 1
To be fair, the book value of a bank is not backed up by hard assets like property. Rather, it's supported by $5.5b worth of loans outstanding, which could easily be impaired due to the financial stress in the regions where Bladex operates. Now, those loans are ostensibly backed by some kind of collateral, but in a deteriorating situation, you wouldn't expect the value of that collateral to match the value of the loan 1:1.

This is just to say that I agree Bladex is attractive (7% yield too!), but don't underestimate the potential for near-term downside.

Tim
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