Microfinance institutions have an array of funding sources available, all of which should appeal to investors, says Vikram Gandhi, global head of Credit Suisse’s financial institutions banking group.
Category: Bonds
Posted inDaily Brief
ABN Personnel Move Sparks $1.6bn EM Outflow
News that veteran EM portfolio manager Raphael Kassin has quit ABN AMRO’s Global Emerging Market Bond Fund coincides with a $1.6bn redemption from that $6bn fund in the past week. Were it not for the outflow associated with Kassin’s departure, EM would have seen inflows of $160m last week, according Emerging Portfolio Fund Research.com (EPFR). Kassin is moving to Credit Suisse in mid-July, where he is expected to take up a similar role. There is heated speculation about why he is moving at a time when his fund is presumed to be doing very well. However, a source close to Kassin says the move was just a run of the mill talent poach driven by an attractive offer from Credit Suisse. ABN’s AAF Emerging Market Bond Fund has had a stellar performance in 2006, ranking top of the EM funds tracked by EPFR, with a 30% return, beating the group average by 20 points. But in the Jan-Feb period the fund was down 0.9% and ranked 51 out of the 53 funds tracked by the service. In early March, the fund was 31% invested in Argentina, 25% invested in Venezuela, and had zero exposure to Brazil, Russia or Mexico. Another 26% was in cash, according to EPFR.
Posted inDaily Brief
IMSA In Talks With Ternium
IMSA, Mexico’s largest steel-maker, has announced it is in talks with Luxembourg-based Ternium, the largest steel-producer in the region, over a possible sale or strategic alliance. Ternium, which is owned by Argentina’s Techint, has been eying the Mexican business since last year, according to market reports. In a filing with the Mexican Stock Exchange, IMSA said it had also attracted interest from other companies in the sector as part of the trend of consolidation seen currently in the steel industry worldwide. Last October, the Canales Clariond family took control of IMSA after upping its stake to 86% when it paid just over $1 billion for a further 43% stake.
Posted inDaily Brief
Arcelor Mittal, CVM Agree Terms
After protracted negotiations stretching over the best part of a year, leading steel group Arcelor Mittal has agreed terms with Brazilian securities regulator CVM for its buyout of local shareholders. The regulator announced earlier this year that the Luxembourg-based company had to raise its offer to minority shareholders in brazil in order to close its merger. Last year, Netherlands-based Mittal Steel bought steel company Arcelor Brasil as part of its takeover of rival Luxembourg-based steelmaker Arcelor in a deal worth $37.3 billion. Following the merger, the CVM ruled that Mittal had to offer to buy out minority shareholders of the Brazilian unit. The European company offered 33.3 reais per share, well below the 51 reais per share demanded by shareholders. CVM had initially demanded a price of 47.9 reais per share in February but later accepted an offer from Arcelor Mittal of 11.70 reais per share in cash and 0.3568 of its own A shares, in total worth 51.27 reais a share, according to the company.
Posted inDaily Brief
IDB Approves $400 million Credit For Mexican Toll Roads
The IDB has approved a partial credit package of up to $400 million to help finance the privatization and concession of a four-highway network in Mexico. The credit is intended to help the eventual developers of the infrastructure projects obtain long-term financing via bonds and loans in Mexican pesos at better terms than it would be able to achieve without the guarantee.
Posted inDaily Brief
CAF Grants $600 Million For Tocoma Project
Caracas-based Andean Development Corporation (CAF) has approved a $600 million loan to part-finance Venezuela’s hydroelectric plant Manuel Piar (Tocoma), situated in the south of the country. Due to be completed by 2014, the facility will have a capacity of 2,160MW. This is the second loan granted by CAF to the project – the first was for $300 million in 2004. The total cost of the project is set at just over $3 billion and is being financed by the state and other “multilateral sources”, according to CAF.
Posted inDaily Brief
Costa Rica Goes For CAFTA Referendum
President Oscar Arias of Costa Rica has announced that the country will hold a referendum with regard to ratifying CAFTA – the free trade agreement with the U.S. Arias publicly supported CAFTA, which is as yet unratified in Costa Rica, during his presidential campaign, claiming it was the only way to attract foreign investment to the country. However, the trade pact has come under strong criticism in the Central American country by those who fear competition will destroy local production.
Posted inDaily Brief
EM Fixed Income Funds Return 2.33% In Q1
Emerging market funds had the second best performance of all of the fixed-income funds tracked by Lipper in the first quarter. EM funds returned 2.33%, beating out the 1.15% and 1.09% returned by global income and international income funds. The latter, in fact, was the second worst performer of all of the 32 fund classes tracked by Lipper and the top performer was high yield, which saw a 2.61% return. The average for bond funds over the quarter was a 1.50% gain, Lipper data shows.
Posted inMagazine
Arming for an Ecuador Default
Bondholders should lawyer up, locate the assets and consider a pre-emptive strike against Ecuador in the run up to default. The sovereign is steeling itself for a legal fight. by Kenneth S. Levine*
Posted inDaily Brief
FMO and IDB Launch Local Currency Fund for Micro Institutions
FMO, the international development bank of the Netherlands, together with the Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB) have signed for a local-currency fund (Locfund) to offer financing to micro and small businesses in Central America and the Caribbean. FMO will finance the new facility through its MASSIF fund, which provides venture capital and loans in local currency to banks in developing countries, so that the can serve local micro and small businesses and consumers more effectively.