Category: Argentina

Argentina’s securities market (Merval) has launched a new debt instrument – Merval Bonos Indexados (MBIX) – which brings together in one basket the eight most representative index-linked notes in the local market. These include the first eight peso-denominated bonds in the IAMC index: Boden 2008, Boden 2014, Bocon Pro12, Bocon Pre8, Bocon Pre9, Bogar and the new debt securities issued with the debt swap, Par and Discount. None of the underlying bonds can have more than a 35% weighting in the securities certificate (Ceva). In November, Merval launched the first Ceva when it began to trade Macc, a certificate that bundles together the top eight stocks on the Merval local index into one financial instrument.

Argentina’s economy expanded 9.1%, year-on-year, in July, taking growth for the first seven months of the year to 8.5%. The strong growth – the strongest since last November – surprised most analysts who had forecast an increase of 8.3% for the period. Economic expansion was 1% up on June, according to Argentina’s national statistics institute (INDEC), which published the figures. The market is now looking forward to August’s performance to compare it to the same month last year when the economy had its strongest growth of 10.5%. Some believe GDP may expand at around 9% this year to match last year’s expansion.

Spanish pulp company Ence has said it is to relocate its planned pulp and paper mill, which was to be built on the border between Uruguay and Argentina, to another as yet unnamed site in Uruguay. The planned mill – along with another by Finnish company Botnia — provoked strong protests by Argentine environmentalists, led to international arbitration and caused political friction between Uruguay and its larger neighbor. Ence claims environmental issues have not provoked the relocation decision, but rather logistics. The company denied it was planning to pull out of Uruguay. The two planned pulp and paper mills represent the largest foreign investment ever in Uruguay – totaling $1. 7 billion.

Argentina has revealed that an investment group headed by George Soros is interested in investing in the country’s fledgling biofuels industry with a commitment of between $300 million and $500 million. The investment would be based in the province of Santa Fe and envisages a plant producing biofuel based on maize and sugar-cane.

Argentina’s government sent its 2007 Budget proposals to Congress for approval Friday. The government foresees an increase of almost 15% in spending next year. The Budget forecasts economic growth of around 4%, average inflation of 7.7% and an increase in investment of 7.2%. So far this year the economy has grown at an average pace of 8%, following last year’s expansion of 9.2%. Meanwhile, following a meeting between Argentina’s President Nestor Kirchner and President Nicanor Duarte of Paraguay, in New York, Argentina has agreed to swap $8 billion of debt owed by Paraguay for 8,000 gigawatts of energy a year from the Yacyretá hydroelectric facility.

Texas-based energy company Pluris Energy Group (formerly Petrogen), has bought a stake in Argentine crude oil and gas producer San Enrique Petrolera in a deal worth between $40 million and $65 million. The acquisition is due to be financed via the issuance of bonds. San Enrique has stakes in oil field operations in Tierra del Fuego, Mendoza and Santa Cruz. Fenix Partners acted as financial advisor to San Enrique.

Argentina’s mortgage-backed securitization market is due to get a boost after the country’s largest banks announced they would be offering mortgage loans for up to 30 years, charging fixed interest below annual inflation rates. In all, 17 banks signed up to a plan supported by President Nestor Kirchner aimed at promoting accessible mortgage lending. Recently, there has been talk among bankers about the need to create a “local Fannie Mae” along the lines of the US federal national mortgage association, to help stimulate the secondary market for mortgage-backed securities.

Figures released Thursday by Argentina’s national institute of statistics (INDEC) indicate second-quarter economic growth of 7.9% in the South American country, taking first-half expansion of the economy to 8.3%. First-quarter growth of 8.6% was revised up to 8.8%.

The International Monetary Fund (IMF) has forecast that Argentina and Venezuela will lead growth in Latin America and the Caribbean this year of 4.8%, higher than the regional growth of 4.3% forecast by the Fund earlier this year. Argentina will post economic expansion of 8%, Venezuela of 7.5%, Mexico 4% and Brazil 3.6%. Nevertheless, the region’s growth will still lag behind overall global growth of 5.1% this year. The IMF also repeated last year’s warning that Latin America is vulnerable to a fall in world commodity prices. It has urged countries in the region to use windfall revenues to cut debt levels ahead of a downturn in these prices.

Venezuela and Argentina will launch their much-anticipated “Bono del Sur” by October 15, at the latest, according to Venezuela’s finance minister, Nelson Merentes. The bond, to be issued jointly by the two sovereigns, as announced earlier this year, will total $5 billion and will be offered in tranches of $1 billion. Two of these tranches are expected before the end of the year. The bond will be issued from Venezuela.