Latin American countries were the top issuers of local currency debt in the third quarter of 2005, thanks mainly to Brazil. The Bank for International Settlements (BIS), which publishes the figures of local currency issues in international markets, noted that Brazil’s real-denominated offering in September, worth $1.5 billion, accounted for most of the region’s total local-currency international issuance of $2 billion.
Category: Daily Brief
Posted inDaily Brief
Argentina Telecom Personal $ Notes Rated B-
The 2010 dollar-denominated notes of Argentina’s Telecom Personal have been rated B- by Standard & Poor’s. The 144A securities of up to $300 million are being issued to help finance part of the company’s existing debt. Telecom Personal is owned by Telecom Argentina SA and the rating reflects the close link of Personal’s credit quality with that of its parent company.
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Argentine Inflation At 28-Month High
Argentina’s consumer prices rose 1.2% in November, above the average forecast by analysts. Inflation for the year, as at November, stood at 11.1%, overshooting government targets. Annual inflation to November was 12%, the highest rate in 28 months. The government has, however, managed to secure an agreement by food retailers to drop the price of 250 basis products by 15% in its efforts to contain inflation.
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Brazil Revises Down Growth Forecasts
Brazil’s central bank has revised down its growth forecasts for this year from 3.4% to 3.0%. This follows the recent announcement of the economy’s slowest growth in two years – 1% y-o-y in the third quarter against 4% in the second quarter.
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Chilean Consumer Prices Drop
Consumer prices fell in November in Chile by 0.2% and inflation in the 12 months to November stood at 3.6%. The strong peso and lower fuel prices have pushed up imports and increased domestic competition. The central bank is expected to keep interest rates unchanged this month, as a result of the lower inflation figures.
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Brazil Seventh Currency Swap Auction
Brazil has carried out its seventh currency swap contracts auction since November in a continuing bid to get rid of excess dollars in the market. The central bank sold 11,300 currency swap contracts, worth $541.2 million, maturing between 2006 and January 2008. Brazil has sold just over $3 billion of currency swap contracts since 18 November when it resumed selling the instruments after an eight-month break. Despite the announcement of the sale yesterday, Monday, the real continued to strengthen against the US dollar, driven by increased investment and trade flows.
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Buenos Aires Debt Swap Take-up 80%
The $2.9 billion debt swap announced at the beginning of November by the Province of Buenos Aires has been well received by investors who have taken up 80% of the offer, according to officials. The offering period closes in two weeks’ time and is expected to achieve a 90% uptake.
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Chávez: Path Opens For Reelection Bid
President Hugo Chávez’s party, Movimiento V República, has won a resounding majority in Venezuela’s parliamentary elections on Sunday. Movimiento V República increased its 86 seats to 114; together with other pro-Chávez parties, it gained all the 167 seats in Congress. This majority allows Chávez to proceed with constitutional changes that will allow him to run for a further presidential term next year. Critics of the government have questioned the legitimacy of the elections after the five main opposition parties boycotted the election as did 75% of the registered voting population.
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Chile Growth Slows In October
Chile’s GDP expanded at a slower rate in October than in the previous two months as mining production dropped. Year-on-year growth was 4.9%, compared with 5.4% in September. Analysts say it is likely that with a fall in consumer prices last month, the central bank will not raise interest rates in December. This would be the first time since July that rates remained unchanged.
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Peru: Government Names Election Candidate
Jeanette Enmanuel has been named the presidential candidate of Peru’s ruling party Perú Posible for the upcoming elections next April. Enmanuel, who owns a natural medicines business – Santa Natura, has gone on record as saying she will not draw a presidential salary if elected. The businesswoman, who has no experience of politics, also said she would reduce the salaries of the national legislators.