Fitch has upgraded Dominican utility Empresa Generadora de Electricidad Itabo (Itabo) to B from B-, while also revising the outlook to positive. The agency cites the recent ratings revision for the sovereign and the positive impact of policy changes. “Over the past year, the Dominican Republic government has implemented changes aimed at strengthening the operational and financial viability of the electricity sector in the country,” it says.
Category: Corporate & Sovereign Strategy
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S&P Gives IG To Uruguay External Issues
S&P raised Uruguay’s foreign and local currency ratings Monday to BB+ from BB, but also moved its foreign currency issue rating to BBB minus from BB+, meaning that external debt issues will now carry an investment-grade rating. The investment-grade reflects high expected recovery rates in the event of default. The agency cites the country’s ability to maintain similar economic policies during different administrations, including efforts to reduce the government’s exposure to foreign currency debt to avoid external shocks. “The upgrade on Uruguay incorporates its growing track record on the implementation of prudent and consistent economic policies,” the agency says.
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Elekra Seeks $350m to Fund Capex: Fitch
Fitch has put a $350m size on Grupo Elektra’s new RegS 7-year NC4 bond after rating it BB minus yesterday. This comes as the Mexican retailer wraps up roadshow today in New York, London and Hong Kong with investors heard discussing mid-to-high 7% pricing. Grupo Famsa, another Mexican retailer, is being seen as the main comp, with its $200m of 11% 2015 NC3s being quoted at around 8% area on Friday, though it has lower B/B+ ratings and a shorter tenor. Sister company TV Azteca, rated BB minus, is seen as another possible pricing gauge with its RegS only 7.50% 2018 trading Friday at 7.12%-6.92% Friday. As positives, Fitch cites the company’s strong market share, considerable brand recognition and its geographic diversification in both the retail and finance space though Banco Azteca. Debt to Ebitda on a consolidated basis for the last 12 months ending June 30, was 9.9x versus 10.0x last year, while with the standalone retail business it was above 2x, the agency says. Fitch sees this climbing to 2.5x by the end of 2011 due to additional financing to cover capex needs, including this issue. For 2011, capex will reach around MXP2bn, it adds. Leads on the issue are BCP, Jefferies and UBS. Elektra is tapping the international markets after an over 10-year absence. It last issued a foreign bond in 2000 when it priced a $275m 8-year NC4 at par to yield 12% through Warburg Dillon Read. At the time, the company was rated B2/B.
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Panama Makes OECD White List
Panama has been placed on the Organization for Economic Cooperation and Development’s (OECD) list of financially transparent countries. The OECD’s White List consists of countries which have substantially implemented international standards for the exchange of information. Previously, the OECD had included Panama on its list of countries considered to be tax havens. The promotion came a day after S&P revised its outlook on Panama’s BBB minus rating from positive to stable and in the wake of the signing of a double taxation treaty with France.
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S&P Preps Panama for Upgrade
S&P has revised the outlook on Panama’s BBB minus rating to positive from stable, setting the stage for an upgrade over the next year or so should the country’s economy continue to perform well. Between 2005 and 2010, Panama’s GDP grew on average by 8%, with Fitch forecasting 7.5% for this year and an average of 5.5% over the 2012-2015 period. “In our view, higher growth, along with rising investment in Panama’s infrastructure could lead to faster-than-expected improvement in the sovereign’s financial profile and long-term economic resilience,” says S&P credit analyst Roberto Sifon Arevalo.
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Standard Chartered Closes LatAm Sov Desk
Standard Chartered has closed its LatAm sovereign and CDS trading business, citing decreased trading volume. According to a Standard Chartered spokesperson, the closure is specific to the sovereign and CDS products, and does not reflect a withdrawal from DCM or LatAm.
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Cencosud Loses CFO
Chilean retailer Cencosud’s CFO, Gerardo Molinaro, will leave the company, effective July 31. CEO Daniel Rodriguez, will take over the role in the interim.
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Cuervo to Head Santander LatAm AM
Jose Cuervo has joined Santander Asset Management as global head of regional mandates for LatAm equity. Cuervo joins Santander from HSBC Global Asset Management, where he has worked since 1998. Santander Asset Management’s LatAm investment platform consists of 80 fund managers and analysts. Cuervo’s role at HSBC is being taken over by Pedro Bastos and Natalia Kerkis.
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Ecopetrol Sale Seen at $1.1bn-$1.7bn
Colombia’s Ecopetrol will seek to place COP2.0 trn-COP3.0trn ($1.14bn-$1.71bn) in an equity follow on, according to remarks made by its CEO and confirmed by a company spokesman. This amount is an estimation based on the state-controlled oil producer’s needs, the spokesman says, with exact details decided at a board meeting Friday. The issuer has scheduled a July 27-August 17 order period for the local-only sale, and must state the exact number of shares and the share price on prior to the July 27 opening. A COP2 trn-COP3trn deal would represent between 1.5% and 2% of Ecopetrol, despite the government’s authorization to float up to 9.9%. Credit Suisse, JPMorgan and Bancolombia are expected to manage the sale after being mandated as bookrunners on Ecopetrol’s previous transaction. Shares closed at COP3,710 Tuesday.
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Enap Appoints New CEO
Rodrigo Azocar Hidalgo, the CEO of Chilean national oil company, Empresa Nacional del Petrolio (Enap), is stepping down and will be replaced by Ricardo Cruzat Ochagavia at the end of July. Cruzat was CEO of Transnet from 2008 to 2011. In June, the state-owned company was heard seeking a $500m loan via 3 and 5 year tenors.