Exceptional volatility caused by the global financial crisis has wiped out much of the last five years of hefty fund gains. Managers struggle to position for recovery.
Category: Bonds
Posted inMagazine
Boutique Investment Banking: Who Are the New Players?
With the investment banking model under siege, entrepreneurs see an opportunity to fill a void in sellside service. An oversupply of available talent helps drive the process.
Posted inMagazine
Trade Finance: China Weighs
Multilaterals, ECAs and China are covering for traditional providers of trade finance, who are expected to deploy less this year. However, commercial banks are poised to jump back in.
Posted inDaily Brief
IDB Extends Credit to Honduras
The IDB has approved a $50m credit line for Honduras to revamp the road that connects capital city Tegucigalpa with Puerto Castilla, improving freight and passenger transportation conditions. The road is known as the agricultural corridor. The credit line consists of a $35m million tranche for a 30-year term, with a 5.5-year grace period, and carries a variable interest rate. The remaining $15m is for a 40-year term with a 40-year grace period and a 0.25% interest rate. The program is expected to cost $77m, of which the OPEC fund for International Development will provide $25m. The Honduran government’s $2m contribution will come from local counterpart funding.
Posted inDaily Brief
IDB Increases Grants to Haiti
The IDB plans to give Haiti $120m in grants in 2010, a $20m increase from what it will have given the country this year. Haiti received $50m from the IDB in 2008. The are designed to help Haiti invest in infrastructure, basic services and disaster prevention, says the IDB.
Posted inDaily Brief
NCR Builds ATM Facility
NCR, the business technology company, is building a new manufacturing and R&D center in Brazil to produce ATMs, as well as other LatAm and Caribbean markets. NCR will initially invest around BRL73m in the Brazil facility. Brazil is the third largest ATM market in the world, says NCR. The Brazil ATM market will grow 16% by 2012, it adds, citing Retail Banking Research. NCR’s ATM production in the region is currently outsourced to a contract manufacturer. ATM manufacturing and product development will be moved to NCR’s new facility and production is anticipated to begin by December 2009. NCR is based in Georgia.
Posted inDaily Brief
Gerdau Renegotiates Loan Covenants
Brazilian steelmaker Gerdau has renegotiated leverage covenants on $3.7bn worth of bank loans, according to Monday filing with the CVM. The change will cost Gerdau between $20m-$60m, it says. The outlay will presumably go towards paying amendment fees and higher margins on the facilities to reflect increased risk to banks. Gerdau was heard to have paid banks an amendment fee of 25bp. Two of its recent dollar facilities were launched last year paying 125bp and 150bp. The covenant renegotiation involved more than 40 banks, says Gerdau. A recent drop in economic activity has hurt the steel sector, which analysts and executives say was already long overdue for a cyclical downturn following years of rising prices. Gerdau’s leverage covenants now state net debt to Ebitda must be below 5.0x, compared to a previous gross debt to Ebitda ratio of under 4.0x. It now must also have a Ebitda to net interest expense ratio higher than 2.5x, compared to the previous Ebitda to interest expense ratio floor of 3.0x. Finally, maximum consolidated gross debt must not exceed $11.0bn. Gerdau says it expects its revenues to stabilize by 2010, which will allow the company to reestablish its prior loan covenants.
Posted inDaily Brief
Guatemala Gets $22m from IDB
The IDB has approved a $22m loan for Guatemala so the country may bolster its network of protected areas. Protected areas and national parks cover 31 of the national territory, the IDB says. The IDB loan is made up of a $17.6m loan for 30 years, with a 6-year grace period, and a $4.4m loan for 40 years, with a 40-year grace period.
Posted inDaily Brief
IDB Approves Opportunity Funds for Mexico
The IDB has approved a $600m loan for Mexico under the Oportunidades program, which offers conditional cash transfers. The loan aims to help fight poverty. Mexico’s department of social development will carry out the program. The loan was granted for a 25-year term, at a spread to Libor.
Posted inDaily Brief
EM Bonds on Winning Streak
On the week ended June 10 EM Bond Funds “managed to extend their winning streak, the longest since Q3 07, as investors committed another $102m despite Latvia’s woe and the “haircut” Ecuador has imposed on holders of its sovereign debt,” says EPFR Global. As for performance, EM debt funds were up 0.20% on the week ended June 11 while other world income funds’ performance weakened, Lipper data reveals. Global income funds were down 0.18% and international income funds dropped 0.60%.