Colombia is set to start awarding its $22 billion highway concession program. But managing the financing is easier said than done
Category: Corporate & Sovereign Strategy
Posted inMagazine
Front Notes: Value for money
Long gone are the days of default and hyperinflation. Today, the pressing challenge facing Latin America’s governments, financial regulators and central banks is no longer recovering from crisis, but managing […]
Posted inDaily Brief
Moody’s Lowers Maxcom
Moody’s has lowered Maxcom’s rating to Ca from Caa1, it says. The move follows the Mexican telecom’s announcement that its recently closed debt and equity tender offers did not meet required minimums, and that it would need to seek strategic alternatives, such as chapter 11. Following a sale to private equity firm Ventura Captial Privado last year, Maxcom was counting on the tender – offering to replace debt due next year for new 2020 bonds – to meet a June coupon payment. “The current weak position of Maxcom’s liquidity ($8.5m in cash available as of March 31) and the limited perspective for a solution in the short term raises the possibility that the company can’t make its next interest payment of about $11m scheduled for June 15,” Moody’s says. The agency also points to weak sales growth and low revenue. The outlook is negative.
Posted inDaily Brief
Moody’s Cuts Homex
Homex joined the run of Mexican homebuilders have their ratings cut, with Moody’s lowering it to B2 from Ba3. The agency cites highly constrained liquidity and funding that leave Homex with a diminished capacity to pay and refinance debt maturities, and to grow its business – despite a recent deal to raise $400m from the sale of prison assets to Carlos Slim companies. “Homex’s operating results for 2013 will remain under significant pressure, resulting in continued negative free cash flow,” Moody’s says. The rating is under review for further downgrade.
Posted inDaily Brief
S&P Positive on Suriname
S&P has raised the outlook on Suriname’s BB minus rating to positive on an expectation of improved growth. The agency highlights improving macroeconomic fundamentals, robust medium-term growth prospects, a low debt position, and solid external indicators. These are offset somewhat by a narrow economic base and institutional capacity constraints. “Large investments in Suriname’s mining and oil sectors could lead to higher growth prospects as well as higher levels of exports and government revenues. Additionally, tax reform and the creation of a sovereign wealth fund could lead to improved fiscal flexibility,” S&P says. Average GDP growth for the past 10 years has been 5%, and the agency estimates growth potential of 4%-5% during the next three years. Suriname’s central bank has indicated that the government intends to issue its first-ever sovereign bond for more than $500m to to finance its equity share in planned joint ventures with two North American mining companies and to fund state-owned oil company Staatsolie, S&P says. Suriname is rated Ba3/BB minus by Moody’s and Fitch.
Posted inDaily Brief
Geo Coupon Miss Raises $700m Acceleration Fears
Ratings agencies have cut Corporacion Geo’s debt rating after the company missed a $2.3m coupon due on Friday on a $400m local bond. Moody’s expects Geo will not pay the coupon in the five day grace period, and that the non-payment will trigger default and accelerate $700m worth of unsecured debt, it says. Moody’s cut Geo’s rating to Ca, from Ca1. Fitch expects bondholders to recover 30% to 50% if the Mexican homebuilder defaults on the note. It cut Geo’s rating to C, from CCC. The Mexican homebuilder appointed Fians Capital and a group of advisors earlier this month to help it consider its restructuring options.
Posted inDaily Brief
Credit Agricole Loan Vet Exits
Jean-Philippe Adam has left Credit Agricole, according to people familiar with the matter. The veteran banker was head of loan syndications for Latin America. It was not immediately clear where he was headed.
Posted inDaily Brief
Itau Plucks BAML ECM Banker
Facundo Vazquez has left Bank of America Merrill Lynch, where he was head of LatAm ECM, according to sources familiar with the matter. He is to join Itau, the sources say. It is unclear who is to replace him at BAML. Spokesman at each bank declined to comment.
Posted inDaily Brief
Maxcom Tender Falls Short
Maxcom Telecomunicaciones has failed to meet minimum requirements for the completion of a debt and equity buyback, it says, and will cancel the offer and seek other options, including bankruptcy. The Mexican telecom, counting on the process to meet an interest payment and complete a takeover by private equity investors, had received acceptance from 62% of holders of its 11% 2014 bonds and 45% of the stock as of Wednesday’s deadline. It had offered bondholders new 2020 bonds paying 7.0% during the first three years, 8.0% during the following two years and 10.0% during the final two years. The offers follow the agreement last year for Ventura Capital Privado to buy Maxcom, at an enterprise value of about $270m.
Posted inDaily Brief
Itau Makes International IB Hires
Itau’s investment banking operation has hired Javier Grana to head LatAm M&A, it says. The former Morgan Stanley banker will be based in Argentina. Marcel Patino, formerly of Citi, will be responsible for developing the investment banking platform for the bank in Colombia. In Europe, the Brazilian bank has hired Ignacio Perez-Cossio, from UBS, for its Madrid office.