Argentina’s country risk has fallen to its lowest level in 10 years driven by the performance of the country’s paper. According to JP Morgan’s Emerging Market Bond Index (EMBI), local yield spreads over US treasuries – a key gauge of investors’ aversion to risky assets – tightened to 317 basis points at the end of last week. At the height of Argentina’s economic crisis in 2001/02 the Argentina EMBI was over 6,500 basis points; the capital markets were effectively closed to the country.
Category: Bonds
Posted inDaily Brief
Submarino Amends Offering
São-Paulo-based Internet retailer Submarino has withdrawn an offering of shares to retail investors after the Brazilian securities market regulator, CVM, said there may have been violations of the “quiet period” – part of disclosure regulation that forbids a company from making a public statement regarding its offering. However, the company is to go ahead with an offering for institutional clients. Submarino had hoped to raise around $300 million from the share offering. The sale is being arranged by Credit Suisse Group.
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Sivensa To Buy Back 15% Shares
Venezuelan steelmaker Sivensa is to buy back up to 15% of its shares in the next six months with the help of a $19 million loan from Deutsch Bank. The buyback, which will cost up to $24 million, is part of a refinancing plan for the company to regain shares held by creditor banks since 2002 when Sivensa restructured its debt. In March the company announced that it will issue around $100 million of new debt to help refinance its $113.5 million debt. The steelmaker, which manufactures steel products for the construction industry, is Venezuela’s second-largest private exporter.
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Ecuador to Buy Back $740 Mln in Bonds
Ecuador will buy back $740 million worth of bonds due in 2012, the government announced. A $400 million loan from the Latin American Reserve Fund and another $340 million from the December sale of 10-year bonds will finance the operation. Finance Minister Diego Borja expects the move to save $20 million a year in debt payments. The country tapped the international bond market last December for the first time since it defaulted on its foreign obligations in 1999.
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Technint Wins Mexican Contract
Argentine company Techint, together with Spanish firm Isolux, has won a $45 million contract to install a fiber-optic network in nine Mexican states. The contract was awarded by Mexico’s state-run power company Comisión Federal de Electricidad (CFE) to allow telecoms companies to extend their service across the country.
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Delegates Discuss DR-CAFTA Challenges
Temístocles Montás, technical secretary of the presidency of the Dominican Republic, addressed the challenges and opportunities facing his country and the other signatories of the DR-CAFTA free trade agreement as the keynote speaker at the first annual LatinFinance Dominican Republic-Central America conference. More than 300 delegates from the public and private sectors, as well as NGOs and multilateral banks gathered at the new Hilton hotel in Santo Domingo to discuss the opportunities and challenges afforded by the region’s nascent but evolving capital markets, the importance of a good business environment to capitalize on increased trade flows, the struggle to lower remittance costs and expand cross-border consumer finance, and the challenges faced in the energy and tourism sectors.
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Mexico To Buy Back Foreign Debt
Mexico will buy back $5 billion of its foreign-currency debt, representing 7% of all the sovereign’s foreign debt, to bring down its current interest payments. Mexico plans to exchange bonds maturing in 2007 and 2033 for a new dollar-denominated benchmark bond due to be issued in the second half of this year. Banxico will announce the face value of the new 10-year bonds on Friday.
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Brazil To Buy Back Brady Bonds
Brazil is to use its rising foreign currency reserves to buy back $6.6 billion outstanding of Brady bonds, representing 8% of the country’s foreign-currency denominated debt. The bonds, created in the 1990s as part of the Brady Plan debt restructuring program, have a call option to be repurchased at par value this April. Brazil’s foreign currency reserves have been boosted over the past year by rising exports and increased foreign investment into the country.
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PDVSA To Buy Back Dollar Debt
Venezuelan state-owned oil company PDVSA is to set aside $83 million to buy back US dollar debt. This follows comments made by PDVSA president and minister of energy, Rafael Ramírez, who said that the company will shortly cease to be registered with the SEC. Ramírez noted that PDVSA is the only national oil company to be listed and filing financial reports with the US regulator.