Argentina has begun swapping defaulted bonds for new securities after overcoming legal challenges to the exchange that will end its four-year default. The debt exchange is a also condition for reviving a $13.3 billion loan accord with the International Monetary Fund, which abandoned talks almost a year ago pending the restructuring. Finance Secretary Guillermo said this month the country might resume selling international bonds after the restructuring.
Category: Paywall
Posted inDaily Brief
Dantas Sells BT Stake
Telecom Italia, Italy’s largest telephone company, agreed to pay $528 million for a stake in Brasil Telecom, resolving a seven-year dispute with financier Daniel Dantas whose investment firm Opportunity controlled the carrier. Telecom Italia said it will buy shares in holding companies that control Brasil Telecom and are held by Opportunity.
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Femsa’s Profit Falls
Femsa, the world’s second-largest Coca-Cola bottler, said first-quarter net income fell 17% to $64 million as interest costs rose faster than sales at its soft drink, beer and Oxxo convenience-store units. Femsa’s interest charges were $90 million, a 29% increase from a year ago, after the company paid $1.25 billion in August for the 30% stake that InBev owned in Femsa’s beer unit. The company’s net debt rose 26% from a year earlier to $3.58 billion.
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Gol Sells Shares
Gol, Brazil’s third-largest airline, and AIG Capital raised $205 million in a sale of 14.7 million new and existing Gol shares. Gol is increasing its fleet to add new domestic and international routes. The carrier boosted its order with Boeing by four aircraft last month as economic growth in Brazil spurred demand for air travel and the airline took market share from competitors.
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Remizov Joins DrKW
German investment bank Dresdner Kleinwort Wasserstein has appointed Alexei Remizov, 36, as director responsible for Latin America Sovereign Origination, based in New York. Remizov moved over from JP Morgan where he headed the bank’s Global Country Risk Assessment and Sovereign Advisory Group. He also worked at Standard & Poor’s as associate director in the Latin America Sovereign Ratings Group and at the World Bank’s Latin American and Central & Eastern Europe country operations departments. Remizov reports to Enrique Bustamante, managing director and head of Corporate Finance & Origination, Latin America.
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Salinas Pliego in Trouble Again
Mexican Finance Minister Francisco Gil Diaz asked prosecutors to bring criminal charges against billionaire Ricardo Salinas Pliego because he used privileged information to trade shares. Salinas Pliego (no relation to the disgraced former president) owns TV Azteca, and a banking and retail empire. In a separate case, Mexican regulators fined Azteca, Salinas Pliego and board member Pedro Padilla $2.3 million for securities law violations. The government’s latest case against Salinas Pliego goes beyond civil charges filed by the SEC, which in January accused him and Azteca of securities fraud for his part in a deal that earned him $109 million. The government’s case will test Mexican legislation for the first time since it made insider-trading a criminal offense. The charges carry a prison term of two to seven years. TV Azteca has separately filed a criminal suit against Gil Diaz accusing him of trying to block a program criticizing a 1994 government bailout of Mexico’s banks and the 2001 sale of Banamex to Citigroup for $12.5 billion.
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Shakeup in Brasília
Senior officials at the Brazilian Finance Ministry and Central Bank have quit unexpectedly. Marcos Lisboa, undersecretary for economic policy at the Finance Ministry has left and will be replaced by Bernard Appy, a close aide of Finance Minister Antonio Palocci. At the Central Bank, Eduardo Loyo resigned from the Central Bank where he was director of special studies and a voting member of the monetary policy council, to join the International Monetary Fund as Brazil’s representative. Neither change is expected to have a significant impact on government or Central Bank policy.
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Venezuela Tightens Control
Venezuela’s Central Bank has announced fixed maximum lending and minimum deposit rates for commercial banks, which will take effect May 1. Banks will have to cap lending rates at the equivalent of the Central Bank’s discount rate minus 50 basis points. With the discount rate at 28.5%, banks will have to limit the rates they charge to 28%. Banks will also have to pay a minimum of 6.5% on saving accounts and 10% on certificates of deposit of 28 days or more.
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Brazil Primary Surplus Hits Record
Brazil’s primary budget surplus, which excludes interest payments, rose to a record R$12.26 billion ($4.9 billion) in March on strong tax revenues and government controls on social security spending. The surplus was 19% up on the same period last year.
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Brazil Sees Higher Inflation
Brazil’s Central Bank said it’s ready to raise the benchmark lending rate for the ninth time since September because rising oil prices are fueling inflation. The bank’s monetary policy committee last week raised the benchmark rate to an 18-month high of 19.5%. According to minutes of the meeting a continued rise in oil prices will force the government to raise domestic fuel costs. Also, a drought in the south of the country may push food prices higher and utility rates may rise more than expected.