Fitch has affirmed El Salvador at BB+ (stable) based on a stable monetary and economic environment and a good record on structural reforms, including the implementation of DR-CAFTA. The agency expects growth of 4% in 2008-2009, led by the agriculture, tourism, manufacturing, and services sectors. “Higher growth remains critical for El Salvador’s dollarized economy to keep public debt dynamics on a downward trajectory, as well as to improve social conditions and increase per capita income,” says Casey Reckman, associate director in Fitch’s sovereign group.
Category: Bonds
Posted inDaily Brief
Investors Launch Microfinance Group
A group of buysiders launched Tuesday in New York the International Association of Microfinance Investors (IAMFI), an organization dedicated to the growing sector. Sam Moss, president of Gray Matters Capital in Atlanta, GA, which manages a portfolio of social investments, has been appointed as IAMFI’s chairman. The organization’s goal is to facilitate capital flows between private sector sources, investment vehicles and microfinance institutions. LatAm is home to a number of successful microfinance projects, including Compartamos, a publicly traded MFI, and Peru’s Mibanco.
Posted inDaily Brief
Brazil Inflation Seen Good for Fixed Income
Brazil’s IPCA inflation rate eased to 0.54% in January from 0.74% in December, below expectations and bullish for fixed income. A decline in food and fuel will give relief to macro economists fretting over region-wide price increases. “The lower-than-consensus IPCA inflation is good news for local fixed income market, which has been rallying on the back of lower inflation releases for February,” says Goldman Sachs. “This should also at least contain, and possibly even reduce expected IPCA inflation for both 2008 and the next 12 months,” it adds. However, it sticks to the view that the Copom will have to raise the Selic to curb credit growth and domestic demand expansion to avoid breaching IPCA targets in 2008 and 2009. But it sees the probability of a rate hike in March as low.
Posted inDaily Brief
AmBev to Buy Back Quilmes Shares
Brazil’s Ambev says it will buy back $385.6m of shares in its subsidiary Quilmes Industrial, following the expiration of a tender offer. AmBev accepted for purchase 3.1m class A shares at $4.125 per share, 8.2m class B shares at $41.25 per share, including 7.2m B shares held as ADS. The total represents 57% of the outstanding A shares and 94% of outstanding B shares. AmBev launched the offer December 28, and will own 99.26% of Quilmes upon its settlement February 15. Credit Suisse was dealer manager on the sale.
Posted inDaily Brief
IDB Signs Brazil Transmission Deal
The IDB has approved a $200m financing for ATE III Transmissora de Energia for development, construction, operation and maintenance of transmission lines in the Brazilian states of Para and Tocantins. It includes an A loan of up to $95.4m from the bank’s ordinary capital and a syndicated B loan of approximately $104.6m. The project, with a total estimated cost of $387m, was awarded to the Spain’s Abengoa through a public bidding process. It is developing the project through its Brazilian subsidiary ATE III Transmissora de Energia. The transmission project includes: a 500kv, 40km transmission line connecting the Maraba and Itacaiunas substations in Para; a 230kv, 110km transmission line connecting the Itacaiunas and Carajas substations in Para; a 500kv, 304km transmission line connecting the Itacaiunas and Colinas substations in Para and Tocantins; and a 500/230kv Itacaiunas substation in the state of Para.
Posted inDaily Brief
Usiminas Buys Mining Assets for $1.85bn
Brazilian steel company Usiminas has agreed to purchase three mining operations in Brazil for a total of $1.85bn, say people close to the deal. The company told the CVM over the weekend it bought J. Mendes, Somisa and Global Mineraçao for an initial payment of $925m. The deal includes an earnout agreement whereby Usiminas will pay an additional $925 based on the performance of the assets. Credit Suisse advised J. Mendes on the sale of the asset. Separately, Usiminas is heard to have just hired investment banks to arrange a syndicated loan.
Posted inDaily Brief
CIE to Buy Back at Least $146m in Bonds
Mexican gaming operator CIE got tenders and consents from holders of $146m, or 79%, of its 8.875% 2015 senior notes, as of the January 31 early deadline. Holders have until February 15 to tender the remaining notes for $1,025 cash per $1,000 in bonds. The repurchase is funded with excess cash resulting from recent asset sales. Citi is dealer manager.
Posted inMagazine
Corporate Bond
High YieldComeback King In a year chock full of corporate biggests and bests, one high yield deal stood out as the trailblazer. Mexican glassmaker Vitro’s $1 billion dual tranche issue […]
Posted inMagazine
Dresdner Shutters New York DCM
Dresdner Kleinwort is effectively closing down its New York-based LatAm DCM business, save for a few sales and trading people. It is shifting resources closer to local markets, according to […]
Posted inMagazine
Local Currency Deal
Tenor Extender The standout transaction for América Móvil, one of the most savvy corporate issuers in the region, was its tenor extending 30-year Europeso issue. The deal almost slipped through […]