Georgina Kessel will head Mexico’s Banobras, replacing Alonso Garcia Tames, according to a spokeswoman for the government development bank. Kessel was previously energy secretary, and has been replaced by Jose Antonio Meade, who moves from the position of deputy finance minister. Tames will next week join Citi’s global banking LatAm group as a managing director. Kessel was named energy minister in 2006 by president Felipe Calderon. She was Mexico’s first female energy minster.
Category: Corporate & Sovereign Strategy
Posted inDaily Brief
Chile Rate Hike Expected
Chile’s central bank is expected to tighten rates today by 25bp to 3.50%. Bulltick says it expects the hike as “the CLP has been responsive to the government’s announcement and initiation of the $12bn currency intervention, inflation expectations are rising as economic growth remains robust and as the process of monetary normalization continues underway.” Credit Suisse thinks Chile will not pause its tightening cycle in the next several months. By year-end 2011, it expects the policy rate to rise to 5.0%.
Posted inDaily Brief
Rodriguez Promoted in Hacienda Shuffle
Gerardo Rodriguez has been promoted to deputy finance minister at Mexico’s hacienda, and will be replaced as public credit director by Alejandro Diaz de Leon. Both changes were the result of Jose Antonio Meade moving to energy secretary from deputy finance minister. Meanwhile, Carlos Montano was named deputy finance minister for spending, replacing Dionisio Perez-Jacome, who was appointed as communications and transport minister. “I think both [the Rodriguez and Diaz] choices will be well-received by the markets,” says Benito Berber, strategist at Nomura. He adds that both are considered knowledgeable and have an excellent rapport with investors. In his previous position with the central bank, Berber explains, Diaz de Leon used to meet with investors, and understands the market. Diaz de Leon had been an executive with the PensionISSSTE pension fund. He previously also held various economic and financial analysis positions at Mexico’s central bank. Rodriguez served as director of public credit since 2004, and recently oversaw Mexico’s return to the yen markets and issuance of the region’s first sovereign 100-year bond. “Rodriguez is well known by the market and is recognized for having done an excellent job as a public debt manager and for having executed several shrewd and innovative debt liability management operations that contributed to reduce the vulnerability of public debt to exchange rate and interest rate swings,” says Goldman Sachs.
Posted inDaily Brief
Morgan Stanley Appoints LatAm Head
Morgan Stanley has given oversight for LatAm to Paul Taubman, co-president of the bank’s institutional securities group. In a memo, Morgan Stanley CEO James Gorman calls LatAm “one of our fastest growing regions.” Taubman will be based in New York and also have responsibility for Japan. His promotion comes as part of a push by Morgan Stanley to expand the international franchise. “We need to focus on our opportunity for significant global growth in the years ahead,” says Gorman.
Posted inDaily Brief
Vitro to Appeal Concurso Rejection
A Mexican court has rejected Vitro’s filing for bankruptcy and restructuring, the glassmaker says, adding that it plans to appeal the decision. Vitro says it will contest the court’s decision and “continue its efforts” to restructure $1.2bn in debt. Vitro filed in December for the concurso mercantil bankruptcy process in Mexico and was also planning to begin Chapter 15 proceedings in the US and seek creditor protection for its US units. It had offered cash and new bonds to holders of $1.2bn in bond in an exchange that was to be the centerpiece of the restructuring. Rothschild is Vitro’s financial advisor in the process.
Posted inDaily Brief
Moody’s Sees Default Rate Falling
Moody’s expects the global speculative-grade default rate to drop to 1.9% by the end of this year, down from 3.1% at the close last year. “This projection is made under the baseline scenario, where the high yield spread is expected to fall and liquidity remains abundant,” says Moody’s. “This, of course, assumes that significant sovereign and financial problems will not develop in Europe.” The agency adds that if Europe slips into further chaos, the global default rate may reach as high as 6.1%. By sector, default rates are expected to be highest in the US consumer transportation sector and the European advertising, printing and publishing sector. The rate has compressed significantly since it hit 13.1% in 2009, up from 4.4% at the end of 2008. In the US, the speculative-grade default rate ended at 3.3% in 2010, down from 14.1% in 2009 and 4.9% in 2008. In Europe, the comparable rate closed at 1.9% in 2010, also down from 2009’s 11.3% and 2008’s 2.1%, says Moody’s. Comerci and Vitro are the only LatAm defaults it records from the last 12 months.
Posted inDaily Brief
CMPC Names New CEO
CMPC CEO Arturo Mackenna will leave the Chilean pulp and paper company, it says, and be replaced by Hernan Rodriguez. After 24 years as CEO, MacKenna will leave April 28. Rodriguez has been with CMPC since 1987 and serves as CEO of the Forestal Minico unit. CMPC does not give reasons for MacKenna’s departure, or what he will do after leaving.
Posted inDaily Brief
Peru Surprises with Rate Hike
Contrary to market expectations, Peru’s central bank tightened its rate by 25bp to 3.25%. The bank says the hike is a preventive measure to avoid inflationary pressures from being influenced by high domestic demand. Barclays, one of the shops expecting rates to remain unchanged, had forecast that Peru would not raise rates until March. Morgan Stanley had thought the central bank was likely to take comfort in the near term from benign inflation data and slowing economic growth to keep rates on hold.
Posted inDaily Brief
Argentina Retires 80% in Brady Swap
Holders of about 80% of Argentina’s defaulted Brady debt representing about $267m equivalent in bonds have accepted a debt swap offer. Argentina was targeting $263m and EUR54m in Brady bonds, to manage external liabilities and cut the risk of legal claims from creditors. The republic retired 81.67% of the USD pars, 89.56% of the USD discounts, 69.27% of Deutsche mark (DM) pars, and 59.85% of the DM discounts through the deal that closed December 29. As a result, it will issue $28.95m in new 2033 discounts, $8.50m in 8.75% of 2017 globals and $86.33m in GDP linked securities. It will also pay $166.60m in cash. Argentina had $185m in 2023 fixed-rate USD bonds, $78m in floating rate 2023 USD bonds, EUR46m in 2023 fixed-rate euro-denominated bonds, and EUR8m in 2023 euro-denominated bonds outstanding, according to the prospectus. Bondholder Communications Group was exchange agent and Cleary Gottlieb is legal advisor, with Citi as fiscal agent. Argentina issued about $30bn in Brady Bonds and defaulted on them in 2001, along with the rest of its external debt. Argentina wants to clear the way for a new dollar bond issuance, in order to provide a benchmark for corporates. Wires reported last week that President Fernandez wants to borrow nearly $7.6bn in 2011 to fund infrastructure projects including railways, telecoms, hydro, nuclear and gas.
Posted inMagazine
BEST BOND HOUSE
The rapidly rising tide of LatAm fixed income lifted all underwriters in 2010, creating at least four serious contenders for Best Bond House.