The French Development Agency (AFD) has agreed to lend Mexico EUR185m to support government environmental-protection policies, Mexico’s finance ministry says. The 20-year loan pays interest at a spread to Euribor, and supports a government program promoting low-carbon development. It is AFD’s first in Mexico, the ministry says, and comes as a part of recent effort to increase activity in Latin America.
Category: Daily Brief
Posted inDaily Brief
Haiti Reconstruction to Cost up to $14bn
An IDB study calculates that it will cost between $8bn and $14bn to rebuild Haiti’s infrastructure, making the earthquake that hit the country in January proportionately the most destructive natural disaster of modern times. IDB economists Andrew Powell, Eduardo Cavallo and Oscar Becerra calculate a base estimate of $8.1bn for a 250,000 dead-or-missing toll, but they estimate this figure is likely to be at the low end. The team concludes that an estimate of $13.9bn is within the statistical margin of error. As of February 11, the Haitian government had reported 230,000 dead.
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IMF Sees Colombia Recovery
The IMF expects a recovery for the Colombian economy thanks following a recession-related dip, thanks to economic policies implemented before and during the global financial crisis. The multilateral says GDP growth is expected to pick up to about 2.0%-2.5% in 2010 compared to a contraction of 0.2% in 2009 as monetary and fiscal policy continue supporting domestic demand. The country’s financial system will also provide a strong basis for a resumption of credit, predicts the IMF. Inflation will expected to rise due to temporary increases in food prices related to El Nino, but nonetheless remain within the 2.0%-4.0% target range during the year, notes the agency. The balance of payments position is expected to improve, with strong capital flows expected to more than cover the increase in the external current account deficit. The global lender also highlights that public debt remains moderate and should decline over the medium term as growth resumes.
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Jamaica Extends JDX Settlement Date
Jamaica has extended the settlement date for its JAD700bn ($7.86bn) Jamaica Debt Exchange (JDX) to February 24 from February15, it says, in order to complete processing of the old notes, and begin issuing new notes. The participation rate is over 97%, “including substantially full participation from institutional investors and a strong response among retail investors,” it says. In the tender closed February 3, the government offered holders of more than 350 government securities a par exchange for bonds with lower interest rates and longer maturities. The maturity extension should be an average 2.5 years, with interest rates lowered from an average of 18%-19% to 12%, according to ratings agency and sell-side analysis. Citi is managed the process, which coincides with a 27-month $1.27bn IMF stand-by agreement.
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Fitch Upgrades Jamaica
Fitch has upgraded Jamaica’s ratings to B minus from CCC, taking into account the recent approval of a $1.27bn IMF stand-by arrangement which mitigates near-term external liquidity concerns. The successful outcome of the domestic debt exchange also supports the upgrade, Fitch says, adding that the outlook is stable. Nevertheless, Jamaica’s credit profile remains weak. While the sovereign secured interest savings through the domestic debt restructuring, Fitch forecasts that Jamaica’s interest-to-revenue ratio will remain extremely high at over 40% during the forecast period. Furthermore, Fitch expects other fiscal solvency ratios to remain weaker than the single B median. For example, general government debt stands at over 120% of GDP compared to a single B median of 31%.
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Codensa Outlines Bond Plan
Colombian energy company Codensa plans to issue COP225bn in 2 tranches, one with a 3-year term paying IPC plus a maximum of 3.5% and the other for 6 years paying IPC plus a maximum of 4.3%. Proceeds of the AAA rated issue will be used to refinance debt, the company says. Codensa is structuring the sale itself and placing it with the help of BBVA, Correval and Corredores Asociados. The issue is part of the company’s general plan to raise up to COP600bn in the local market.
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Colombia’s Popular Taps Local Debt
Colombia’s Banco Popular has sold COP500bn ($254m) in local bonds across 6 tranches, says finance vice president Aida Diaz, adding this is the first issue of a plan to sell up to COP3trn over 3-6 years. A COP99.7bn 18-month tranche pays IBR plus 1.10%; a COP72.5bn 24-month piece pays IBR plus 1.24%; a COP67.0bn 24-month tranche pays DTF plus 1.10%; a COP41.5bn 36-month piece pays IBR plus 1.44%; a COP177.4bn 36-month tranche pays IPC plus 3.30% and a COP41.4bn 60-month piece pays IPC plus 3.90%. Diaz says the bank originally planed to issue only COP350bn, but upsized the amount due to demand, which totaled COP771.0bn. She adds that proceeds of the AAA rated bond will be used for working capital and that Popular lead the sale itself. Subsequent issues will be made depending on market conditions, she says.
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CSN Chases Leftovers, Extends Tender
CSN is heard chasing a 20% stake in Cimpor by courting the Manuel Fino group and Banco Comercial Portugues, each of which own 10.0% of the Portuguese cement company, according to executives involved in the negotiations. The 2 groups are among the only remaining sizable holders of shares in Cimpor that have not been signed away to competitors. Camargo Correa, has recently raised its stake in Cimpor to 28.7% through purchases of shares owned by Teixeira Duarte and Bipadosa, while Votorantim owns a 17.0% stake it acquired from Lafarge and has a shareholder agreement with Caixa Geral de Depositos, which owns 10.0%. CSN has also extended the expiration date of its tender for Cimpor’s shares to February 22 from February 17. The move was expected and is heard to have been proposed by the Portuguese stock exchange, according to an executive involved in the process. Some 19% of Cimpor is accounted for by floating shares, which CSN is targeting with its tender. It recently upped its offer price to EUR6.18 per share from EUR5.75, and lowered its success hurdle to 33% plus one share from 50% plus one share.
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Pinera Sheds Clinic Stake
Celfin Capital has purchase a 9.7% stake in Chile’s Clinica Las Condes that belonged to Chilean president-elect Sebastian Pinera’s Bancard Inversiones, for a total of about $37m, or CLP25,100 per share. LarrainVial, which handled the auction, had said it would offer the 792,338 shares for a minimum CLP24,000 apiece. Pinera is also seeking to divest his 26% stake in LAN Airlines before he becomes president on March 11. Local groups and Brazil’s TAM are heard to be likely purchasers.
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Televisa Prefers Cash for Nextel Buy
Mexico’s Televisa says it has no immediate plans to finance its purchase of a 30% stake in Nextel Mexico agreed Monday with new debt or equity. “We have cash on hand,” executive VP and board director Alfonso De Angoitia says on a conference call. Televisa’s December 2009 cash and marketable securities stood at $3.3bn, according Moody’s. The issuer, however, is likely to receive proposals for financing, given its strong standing with the market and the fact the full spend would eat up close to half of its cash and cash equivalents. When asked about plans for partnering in Nextel International’s other markets, De Angoitia adds the focus for Televisa’s interest in entering the wireless sector is limited to Mexico at this point. Televisa agreed to pay $1.44bn in cash for the stake, with an option for an additional 7.5%. The deal is conditional on Nextel and Televisa being awarded spectrum licenses in a May auction in Mexico. Seller NII Holdings was advised by Lazard, while Allen & Co helped Televisa. Moody’s says the transaction will not affect Televisa’s Baa1 ratings, noting a strong liquidity position and a comfortable debt profile.