Tarcisio José Massote de Godoy, Brazil’s former treasury secretary, will become CEO of private pension company and insurer BrasilPrev on September 1. Godoy resigned from Brazil’s treasury in early June after temporarily replacing Carlos Kawall. Arno Augustin, a former finance secretary in the southern state of Rio Grande do Sul and deputy executive-secretary under former minister of finance Antonio Palocci, became Brazil’s treasury secretary in early June.
Category: Corporate & Sovereign Strategy
Posted inDaily Brief
Agnelli and Immelt Stress CSR
Roger Agnelli, chairman and CEO of CVRD and Jeffrey Immelt, chairman and CEO of GE, stressed the importance of corporate and social responsibility in Latin America at a dinner hosted by the World Education & Development Fund on Monday to honor the business leaders for their commitment to educating underprivileged children in Latin America. Immelt told CEOs, bankers, investors, attorneys and fund raisers gathered at the event that he had never been so optimistic about Latin America’s economies. “It is one of the great places to invest over the next five to 10 years. We have $7 billion in revenues in Mexico and I think we could double that in the next three years. Brazil is incredibly exciting and Chile, Colombia and Central America are opening up for the first time,” says Immelt. GE’s chairman also stressed the importance of building competitive and equitable societies by being a responsible corporate citizen. “All of us see globalization as a tremendous opportunity for our companies, but nobody outside this room agrees with us. We have to give back to make communities more responsible and more self confident,” says Immelt.
Posted inDaily Brief
Inco Acquisition on Track
Roger Agnelli, chairman and CEO of CVRD tells LatinFinance that the acquisition of Inco is progressing “very well”, noting the smooth integration of both cultures. “The environmental problems we thought we had at Inco have turned out to be very manageable,” he adds. Inco was the target of a class action law suit in Canada for contaminating communities in a plant in Ontario. Agnelli adds that he expects CVRD to report strong earnings in 2007, regardless of the softening market environment.
Posted inDaily Brief
New S&P Methodology Confuses
S&P’s new global recovery ratings scale, designed to help investors better determine their probability of recovering investments during a sovereign default, has ended up confusing the market. Participants on a conference call to explain the new methodology questioned S&P analysts repeatedly on whether Colombia was now an investment grade credit. They also questioned the assumptions made on the new numeric ratings that predict investors in Colombia foreign currency debt have a higher probability of recovering their money than holders of Brazilian or Peruvian foreign debt. S&P analysts say Colombia is still a BB+ credit, one notch below investment grade, but outstanding foreign currency senior unsecured debt is now rated Triple B minus, which is investment grade. Peru’s foreign currency issuer rating is BB plus, like Brazil. Its numeric recovery rating is 2 compared to 3 for Brazil and Peru. S&P assigned recovery ratings on a numerical scale from one plus for the best expectations of recovery to six for the worst on foreign currency unsecured debt of 25 speculative grade issuers. S&P believes that in the event of default, investors would stand to recover between 70%-90% of their investment, while investors in Brazil and Peru in category 3, would only recover between 30% and 50%. John Chambers, chairman of S&P’s sovereign rating committee, notes the strength of Colombia’s institutions, its strong record of repayment and its increasing issuance of local currency obligations as reasons for the higher recovery rating.
Posted inWeb Articles
The 7th Euromoney/LatinFinance Caribbean Investment Forum
Regional rainmakers will be joined by a strong international contingent of direct and portfolio investors, many of whom will be keen to know whether the Caribbean’s continued economic uptick is sustainable, particularly in light of burgeoning levels of public debt.
Posted inDaily Brief
Fitch Mulls Codelco Upgrade
Fitch has revised the outlook to positive from stable on Codelco’s long-term foreign and local currency issuer default (IDR) ratings, following a similar recent move on the sovereign. Codelco has a long-term foreign currency IDR of A. The ratings reflect its solid financial and export-oriented operating profile, as well as its position as the world’s largest copper and molybdenum producer, says Fitch. Strengths are tempered by vulnerability to fluctuations in international commodity prices, rising production costs, large capital-investment requirements, increasing debt levels and exposure to political interference.
Posted inMagazine
Ecuador Plays the Markets
Ecuador continues to beguile bondholders, referring to the debt as illegitimate and illegal, yet still keeping up with the coupons. A messy restructuring looms.
Posted inWeb Articles
The 4th Cumbre Financiera Argentina
For the past three years, the Cumbre Financiera Argentina was held in Buenos Aires, providing a high level environment for discussion and debate on the imminent recovery in the Argentine private sector and challenges to international investment. The Cumbre Financiera Argentina brought together CEOs and CFOs from top Argentine companies, international investors and bankers, all the players needed to support the recovery of the Argentine economy, its corporate sector and capital markets to promote dialogue on the investment and financing opportunities existing and appearing in the recovering Argentina.
Posted inDaily Brief
Argentina Holdouts Note Swift Reserve Accumulation
According to American Task Force Argentina (ATFA), which is trying to recoup losses from the sovereign’s 2001 default, Argentine reserves are growing more than $61m a day, or $700 a second. AFTA says it has more than $40bn in international reserves, twice the total amount owed to international and Argentine creditors. “Along with 9% GDP growth, the reserves clock serves as a constant reminder of Argentina’s economic windfall after repudiating more than $20bn in international debt obligations and suggests that Argentina can more than afford to pay its debts to international creditors and, in doing so, allow a much-needed return to the international capital markets,” says AFTA.
Posted inDaily Brief
Formosa Province To Swap Old For New
The Argentine province of Formosa is planning to swap up to $94.9m of its defaulted bonds for new bonds due 2032, according to a filing with the Buenos Aires Stock Exchange. The old bond series were issued in March 1999 and September 1999. Formosa plans to cancel $69.9m of the former bonds and $25m of the latter. The new 25-year paper will have an issuance date of March 4, 2007, and carry a coupon of 5%. The first principal payment will be made in June 2012.