By Duane McLaughlin, Partner, Cleary Gottlieb Steen & Hamilton LLP The credit crunch that began in 2007 has reduced the availability of credit for acquisition debt financing in the U.S. […]
Category: Bonds
Posted inMagazine
SPONSORED GUIDE: The Vale Experience: Using Loans to Finance Growth
By Guilherme Cavalcanti, Head of Corporate Finance, Vale A Sudden Change in Market ConditionsIt is well known that credit market conditions have been deteriorating since the first concern over subprime […]
Posted inMagazine
SPONSORED GUIDE: B Loan Program Thrives
By Roger Hamilton The IDB has done more than 55 syndicated loan operations since 1995 to complement lending from its own capital, working with people from companies and financial institutions […]
Posted inMagazine
SPONSORED GUIDE: The Development of the Corporate Debt Market
By David Felipe Perez, Vice-president of Financial Structuring, Banca de Inversión Bancolombia Compared with other emerging market countries on a worldwide level, there are several Latin American countries that are […]
Posted inDaily Brief
Chile Rate Hike Expected
Analysts expect a 50bp hike in Chile to 8.25% after the central bank meeting next week, citing the persistence of high inflation and unexpected strength of domestic demand. “Inflation has surprised in terms of magnitude and the extent of generalization across items, showing increasing spreading of the food and energy shocks. The central bank has reacted forcefully with three consecutive 50bp interest rate hikes and probably a fourth next week,” says Barclays. The shop also expects that the hikes will continue up to 9.25% by year-end, as inflationary pressures continue. Earlier this month the Chilean central bank hiked the rate 50bp to 7.75% and minutes from the August 14 meeting are due out today. “We expect the minutes to contain language similar to the hawkish language in the July minutes, with the central bank reaffirming its commitment to continue to hike rates to anchor inflation expectations and contain second-round effects from the recent surge in inflation,” says Goldman Sachs. “We see another policy rate hike in September of 50bp,” it adds.
Posted inDaily Brief
Mind the Gap: DCM Hopes for Revival
As borrowers and investors return from the annual seasonal hiatus – this year prolonged my miserable global conditions – cross-border DCM bankers are hopeful of the traditional September bounce in volumes. There is pent up demand and issuers may finally believe the sell side when they are told that the cheap money’s gone away and they need to issue now. But there is still a looming price gulf between issuers and investors. “The big question is ‘has the credit crunch peaked?’,” says Eric Ollom, head of LatAm corporate debt research at ING. That is a tough call, but a lot of the trouble has already been factored in. Defaults have not yet peaked, often a sign of a cycle hitting bottom, but Ollom notes that there should not be too many in LatAm. Investment-grade names can issue whenever they like, but prudent debt management means they can hold off. Bankers are busy trying to convince them otherwise. “We’re advising issuers not to wait – this could be the last opportunity this year,” notes one New-York based banker, repeating a warning that has been issued every summer for at least the last five years. As usual, it will take a respected name to bridge the gap. America Movil and Telmex have maturities approaching, and last week Petrobras’ Jose Sergio Gabrielli reiterated his company’s preference for debt to fund exploration of new oil finds. The region’s top sovereigns may not be in a hurry, but don’t rule out opportunistic taps from Brazil or Colombia.
Posted inDaily Brief
Cabei Readies Taiwanese Issue
Cabei plans to launch the sale of TWD5bn ($159m) in bonds in the Taiwanese market in the first or second week of September. A 5-year tenor would be the most efficient, Jose Felix Magana, head of Cabei’s treasury tells LatinFinance, but the multilateral is also seeing demand for 7-year paper and will soon decide between the two maturities. “In these times, having a global platform has paid off,” Magana says of being able to tap a still liquid domestic market when others are difficult to access. The sale, to be Cabei’s fifth in Taiwan, will be mostly marketed to local institutional investors. The bank has 20% of its liabilities in Asia, having also issued in Thailand, Hong Kong, Singapore and Japan. Cabei plans to sell about $75m in local currency denominated bonds in Costa Rica, Honduras and El Salvador before the end of the year, Magana says.
Posted inDaily Brief
Argentina to Buy Back Bonds Today
Argentina will today stage the first of a series of public debt buybacks via auction, continuing the repurchase initiative it started earlier this month. The sovereign will buy up to $150m in 2012 and 2013 Bodens and dollar and peso-denominated warrants linked to GDP growth known as “cupones PBI.” The economy ministry will field minimum offers of $10,000 and ARS30,000 until 1400 local time. Argentina has privately bought back about $380m of its debt during the last two weeks, with a focus on 2008 and 2009 maturities, in an attempt to halt falling bond prices and boost overall sentiment.
Posted inDaily Brief
Correction: An August 22 Daily Brief
“Brazilian Beats Swiss to ECM Lead” incorrectly states the amount of fees collected by Itau BBA from ECM, M&A and DCM this year. Itau has made $82m in fees for the year to date, according to Dealogic.
Posted inDaily Brief
Bolivia Secures CAF Loans
CAF has approved a $250m credit to Bolivia to fund a social and economic infrastructure program in marginalized areas of the country. The program features investments in the agricultural and hydro resources sectors. Additionally, the multilateral approved a $43.9m loan for the electrical interconnection project of the city of Tarija, a project to be executed by Bolivia’s Empresa Nacional de Electricidad (ENDE). The project includes construction of a 245km electric transmission line, expected to transport up to 230kw of electric power to the city, as well as a fiber optic network between Potosi and Tarija. Pricing and other terms on the loans were not disclosed.