S&P raised Uruguay’s foreign and local currency ratings Monday to BB+ from BB, but also moved its foreign currency issue rating to BBB minus from BB+, meaning that external debt issues will now carry an investment-grade rating. The investment-grade reflects high expected recovery rates in the event of default. The agency cites the country’s ability to maintain similar economic policies during different administrations, including efforts to reduce the government’s exposure to foreign currency debt to avoid external shocks. “The upgrade on Uruguay incorporates its growing track record on the implementation of prudent and consistent economic policies,” the agency says.
Yearly Archives: 2011
Posted inDaily Brief
Transener Eyes Tuesday Pricing on New 2021
Argentine utility Transener is looking to price a new 2021 as soon as today, as it looks issue new debt as part of a debt exchange and buyback of its existing 2016. Books closed yesterday, and the borrower is offering to pay a nominal annual rate of 9.75% on the up to $148.6m issue of 2021s. Investors can exchange the existing bonds for the new 2021s par for par, and receive an extra $30 for each $1,000 if tenders were submitted by the early bird date of July 25. Alternatively, they can cash in the existing bonds and receive $910 for each $1,000 in principal, plus another $90 in early bird premiums. The company is also seeking consents to amend terms and conditions on the outstanding bonds. The final size of the issue could be higher depending on the success of the liability management operation, but it cannot exceed the $300m ceiling set by the program. The exchange offer expires on August 9. The 2016s were originally issued in 2006 with a $220m size and priced at par to yield 8.875%. Citigroup and Deutsche Bank led that transaction and are also acting as leads on this occasion.
Posted inDaily Brief
Unifin to Issue MXP Issue
Mexico’s Unifin Financiera is preparing to issue up to MXP400m ($34m) in the domestic bond market. The 5-year floating rate bonds will pay a spread over TIIE. Pricing is expected at the end of August. Standard & Poor’s and HR Ratings assigned local triple A ratings for Unifin. IXE is leading the transaction.
Posted inDaily Brief
UVA Yet to Pull Trigger
Usina Vista Alegre (UVA) has yet to pull the trigger against what remains an uncertain market backdrop and one in which several investors were unwilling to take a bet on the single B Brazilian sugar and ethanol producer. Whether UVA will move ahead this week remained unclear late Monday, but in the current market environment few thought that it would try pricing any time soon. With the deadline to lift the US debt ceiling looming, most bankers agree that issuers are likely to wait until after Republicans and Democrats reach some sort of resolution on US Treasury payments. “It is going to come down to the wire. Late this week they will probably have something to agree on,” says a banker. “Unless something drastic happens, a positive agreement [over the US debt ceiling] may lend itself to some opportunistic issues.” Still, Mexican retail Grupo Elektra continues to move forward with its 7-year NC4, while utilities AES Gener and Transener are also carrying out their own liability management transactions. This comes as UVA left some investors voicing concerns about its 5.3x debt to Ebitdar ratio and tight liquidity after it released price talk in the 11% area. With investors seeking safety in liquidity, the $150m-$200m or smaller size certainly did not help on what is a sole lead transaction. The sugarcane grower and ethanol producer is rated B minus/B3 and is coming to market through BTG Pactual.
Posted inDaily Brief
EM Bond Inflows Keep Coming
EM bond funds took in $535m for the week ending July 20, according to EPFR Global. According to Lipper, EM debt fund inched higher by 0.72% for the week ending July 21, and are up 5.73% ytd. Meanwhile, global income funds climbed 0.32% for the week, to reach 4.43% growth ytd. International income funds rose 0.91%, bringing the ytd return to 5.57%.
Posted inDaily Brief
La Construction Eyes July 28 Pricing Date
Chile’s Sociedad de Inversiones y Servicios de la Construccion has unveiled more details on its upcoming UF2.5m ($118.9m) 3 tranche domestic bond issue after filing a prospectus late last week. A pricing date has been set for July 28. The borrower plans to issue up to CLP54.8bn in a Series A tranche with a 6.8% coupon, a Series B tranche of up to UF2.5m paying a 3.2% coupon, and a Series C tranche of up to UF2.5m with a 3.6% coupon. Series A and B carry 5-year tenors and bullet payments. Series C has a 21-year tenor with a 10-year grace period. Celfin and IM Trust are managing the sale, rated AA/AA+ on a national scale. The issuer is an investment vehicle of a construction trade association called Camara Chilena de la Construccion. It holds stakes in the AFP Habitat pension fund, insurance companies Camara and Isapre Consalud, while also having holdings in clinic operator Red Salud and other companies.
Posted inDaily Brief
LatAm Equities See More Outflows
LatAm equity funds saw $241m in outflows for the week ending July 20, according to EPFR Global. EM equity funds, meanwhile, had $1.1bn in outflows for the week. However, performance was positive. EM funds climbed 1.46% for the week ending July 21, though they remain down 0.01% ytd, according to Lipper. LatAm funds also rose 1.79% for the week, but remain negative 4.22% ytd. Global small and mid-cap funds also jumped 2.01% for the week, and are up 4.87% ytd.
Posted inDaily Brief
Mexico Gets IDB Loan
Mexico’s Secretaria de Agricultura, Ganaderia, Desrollo rural, Pesca y Alimentacion (Sagarpa) will receive a $190m loan from regional development bank the IDB. The loan has a 25-year term, a 3-year grace period and a rate based on a Libor spread. According to the IDB, it will help finance productivity in the fish and fish-farming sector. The Mexican government will also kick in $74.4m for a total investment of $264.4m, benefiting around 5m agricultural producers. About $70m of the IDB loan will be dedicated to the control and eradication of agrofishing diseases.
Posted inDaily Brief
Panama Makes OECD White List
Panama has been placed on the Organization for Economic Cooperation and Development’s (OECD) list of financially transparent countries. The OECD’s White List consists of countries which have substantially implemented international standards for the exchange of information. Previously, the OECD had included Panama on its list of countries considered to be tax havens. The promotion came a day after S&P revised its outlook on Panama’s BBB minus rating from positive to stable and in the wake of the signing of a double taxation treaty with France.
Posted inDaily Brief
Parque Arauco Sets Share Price
Chilean commercial property developer Parque Arauco has set a price of CLP950 per share for a 90m share sale, which would raise CLP85.5bn ($185.2m). Proceeds will help fund Parque Arauco’s expansion in Chile, Colombia and Peru. Arauco’s shares closed at CLP993 Friday.