In a move that surprised the markets, Colombia’s Central Bank raised the benchmark lending rate Friday by a quarter of a percentage point to 6.25%. The Bank chose to preempt inflationary pressures by raising the rate for the first time since April 2003. The move is also seen by the market as a demonstration of the Bank’s independence, coming as it does just ahead of presidential elections in May and just after comments by President Uribe that he didn’t want to see any rises in interest rates.
Category: Bonds
Posted inMagazine
Indexing Across Borders
Jamie Nicholson-Leener, head of Latin American corporate credit research at Credit Suisse, explains why her investment bank developed its Latin America Corporate Bond Index.
Posted inDaily Brief
Argentine Country Risk At 10-Year Low
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.
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São-Paulo-based Internet retailer Submarino has withdrawn an offering of shares to retail investors after the Brazilian securities market regulator, CVM, said there may have been violations of the “quiet period” –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.
Posted inDaily Brief
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.
Posted inDaily Brief
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.
Posted inDaily Brief
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.
Posted inDaily Brief
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.
Posted inDaily Brief
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.