Faced with an over-valued real the Brazilian government is relying on a wider set of ‘macro-prudential’ measures to fight inflation.
Category: Corporate & Sovereign Strategy
Posted inMagazine
Tilting at Windmills
Mexico’s wind energy market is potentially lucrative. But a lack of government commitment and insufficient transmission capacity could stall its development.
Posted inMagazine
Weighing Credit Risk
Investors are turning to corporate bonds and moving down the ratings spectrum to boost portfolios. This may be part of a strategic shift, but are they weighing credit risk properly?
Posted inDaily Brief
CB Auctions Banco de Chile Options
Chile’s central bank has priced a CLP24.35bn ($51.5m) notional-value sale of share options in Banco de Chile, according to the Santiago Bolsa. The 392.8m options to buy shares at CLP62 through July 4 represent the central bank’s preferential rights from Banco de Chile’s $180m equity follow-on in March. The options priced at CLP3.10 each. The central bank is a minority shareholder in Banco de Chile going back to a government intervention during a 1980s financial crisis, and had decided not to exercise its rights in the March sale. BanChile and LarrainVial managed the recent sale of options. Banco de Chile shares closed at CLP66.75 Tuesday. The CLP62 price matches the price of the 1.4bn share sale in March.
Posted inDaily Brief
Minerva Outlook Revised to Positive: S&P
S&P raised its outlook on Brazilian beef company Minerva to positive from stable, maintaining its B rating. The rating agency cited Minerva’s improving capital structure and reduction of short-term refinancing risks. Although the company is still considered highly leveraged, increasing cash flows should help bring down debt levels, the agency says.
Posted inDaily Brief
BNP Paribas Shuffles Americas Team
Christian Mundigo and Kip Testwuide have been promoted to co-heads of fixed-income Americas. They will move from their current roles as co-head of credit trading & head of fixed-income trading for the Americas and head of fixed-income distribution & origination for the Americas respectively. They replace Bob Hawley, who will become head of fixed income in Asia. Meanwhile, Carlos Urquiaga and Christophe Bernard have been named co-head for the structured debt mining & metals team for the Americas.
Posted inDaily Brief
CS Maintains Lead in Advisory Fees
Credit Suisse has held on to the top spot for LatAm investment banking advisory fees, according to Dealogic. The bank generated $124m in revenue for a 14.9% share of the wallet year to June 22, beating out Itau with $115m and 11.6% and JPMorgan with $113m and 11.4%. The top three maintain their positions from the year before, while HSBC makes an appearance in the ninth spot with $35m in fees after not being on the list last year. Goldman Sachs failed to be among the top 10, despite registering at number 9 this time last year. Morgan Stanley also joined the ranks at the seventh spot with $45m in fees. Fees are significantly higher over last year, up to $991m from $805m for the corresponding period in 2010. Credit Suisse also took the most in M&A revenue with $48m, despite listing third for DCM revenue with $34m and fifth in ECM revenue with $35m. JPMorgan came in first in DCM revenue with $36m in fees, while Itau took the most in ECM advisory fees with $68m.
Posted inDaily Brief
S&P Upgrades Grupo Kuo to BB
S&P has upgraded Mexico’s Grupo Kuo to BB from BB minus, citing an improvement in its financial performance. A stable outlook reflects expectations that Kuo will maintain its key financial ratios and continue to focus on more value-added and profitable businesses, the agency said. The company’s total debt-to-Ebitda ratio is close to 2.5x as a result of debt reduction and stable cash generation. The group controls companies involved in forestry, autoparts, plastics and canned foods.
Posted inDaily Brief
AMX Awarded A Grade
Mexican telecom America Movil (AMX) saw Fitch upgrade its foreign currency rating to A from A minus Thursday. The agency cited the company’s region-wide operations in fixed-line and wireless telephony as well as its strong free cash flow and sound financial profile. Diversification has helped reduce the increased regulatory risks that the company now faces in Mexico. For instance, AMX now generates 48% of its Ebitda outside of Mexico and 80% from investment-grade countries, Fitch notes. The borrower’s total debt as of March was MXP304.4bn ($25.4bn), with 87% issued in the capital markets and another 13% in loans. “Fitch believes America Movil will follow a disciplined approach to its capital structure and the valuation of any potential acquisition,” it says. The company was thought to have saved itself a considerable sum in fees after recently squeezing banks on pricing after conducting an usual auction system to mandate for a dual-tranche $4bn loan syndication. In April, it priced a $2bn 3.5-year at Libor+50bp and a $2bn equivalent EUR-denominated 5-year at Euribor+60bp. Such levels have inspired other companies to try their luck in the bank market as well.
Posted inDaily Brief
Fitch Upgrades BBVA Colombia to BBB
Fitch has upgraded the ratings outlook for BBVA Colombia (BCO) to BBB from BBB minus, on the heels of Colombia’s sovereign rating upgrade. The prospects for corporate Colombia are likely to brighten as consumer confidence fuels credit growth and consumption, the agency says. BCO is expected to continue to grow its loan portfolio across all segments by 15%-20% over the next year or so, Fitch adds.