Puerto Rico has been suffering a recession for more than four years. Several banks have collapsed, unemployment has soared and bankruptcies have increased.
Category: Economy & Policy
Posted inMagazine
Best Bank – Bolivia
Bolivia’s small size has meant its banks suffered few effects of the credit crisis in 2008 and 2009.
Posted inMagazine
Best Bank – Trinidad & Tobago
Trinidad & Tobago’s (T&T) Republic Bank has been able to grow its assets despite a weak economy and reduction in its loan portfolio.
Posted inDaily Brief
Colombia Leaves Rates at 3.00%
Colombia’s central bank left the monetary policy rate unchanged at 3.00% as expected by the market. The bank cites lower-than-expected annual inflation of 2.28% and a strengthening of the local economy, which it expects to grow at around 4.50% in 2011, in line with expansion seen this year. Morgan Stanley expects Colombia to tighten to 6.00% by the end of 2011 while Barclays believes the rate will stay on hold until April.
Posted inDaily Brief
Colombia Rates Seen Steady
The market expects Colombia’s central bank to keep its monetary policy rate on hold at 3.00% today. Morgan Stanley says growth is in line with expectations and inflation remains below target. It expects the rate to tighten to 6.00% by the end of 2011. Barclays also sees the rate on hold with tightening beginning in April, although it says there is a risk it could begin later in the year.
Posted inDaily Brief
Helm Bank Issues Bonds
Colombia’s Helm Bank has issued COP400bn ($218m) in local bonds. The AA+ issue was done in 4 tranches, all priced at par. A 3-year COP97.9bn piece pays IBR plus 1.64% to yield 4.75%, a 3-year COP118.2bn piece pays IPC plus 3.00% to yield 5.35%, a 5-year COP67.2bn piece pays IPC plus 3.50% to yield 5.86% and a 7-year COP117.5bn piece pays IPC plus 4.12% to yield 6.49%. Proceeds will be used for working capital. Helm’s own brokerage managed the sale.
Posted inDaily Brief
Banobras Sees Demand for 4-Year Issue
Mexico’s Banobras has issued MXP7bn 4 year bonds on Tuesday on more than MXP19bn of orders, according to a banker at sole lead Banamex. The bonds priced flat to TIIE, the low end of 0bp-10bp guidance, says the banker. “The order book was diverse with all types of investors,” he adds. Investors had said TIIE flat was fair for the credit. The bonds were rated Aaa on a national scale by Moody’s. The rating is based on the bank’s status as a government-backed issuer. Banobras provides financing for states and municipalities, particularly for infrastructure projects.
Posted inDaily Brief
Elementia Lands at Guidance
Mexico’s Elementia has issued MXP3bn in 2015 bonds at a spread of TIIE plus 275bp, according to one of the leads. This was in line with 275bp area guidance. The bonds were issued to finance operating costs and to refinance outstanding debt, including half of the debt from any existing $450m 5-year term loan. Moody’s assigned a Ba3 rating to the bonds and a Ba3 corporate family rating to Elementia with a stable outlook. Inbursa and Arka were the leads.
Posted inDaily Brief
Popular Issues COP Bonds
Colombia’s Banco Popular issued COP300bn ($163m) in local bonds in 4 tranches, all priced at par. A 1.5-year piece pays IBR plus 1.10% to yield 4.19%, a 2-year piece pays IBR plus 1.20% to yield 4.29%, a 3-year tranche pays IBR plus 1.40% to yield 4.50% and a 3-year tranche pays IPC plus 2.64% to yield 4.98%. Total demand was COP469bn. Proceeds will be used for working capital. The notes are rated AAA and the bank lead the sale itself.
Posted inDaily Brief
Brazil Private Equity Hopes to Dodge New Tax
Brazilian private equity funds, known as FIPs, are lobbying the government for an exclusion to the recently increased IOF tax. Brazil last week hiked the charge to 6% from 4% to try and contain FX appreciation from heavy cash inflows. However, the ABVCAP local private equity and venture capital association argues that its members should not be subject to the tax, due to the long-term nature of their investments. Ken Wainer, managing principal at VBI Real Estate, says FIPs have to pay the 6% tax upon receipt of foreign funds. This is a heavy burden, he adds, since payment is required before any gains can be realized. A New York-based banker who invests in Brazil says the tax increase will cause a “small slowdown” by foreign LPs investing in PE in the short term. An ABVCAP spokesman says he does not expect any change until after the upcoming elections. If a foreign investor were to invest directly in a Brazilian company without going through an FIP structure they would not be subject to the IOF tax. However, they would get hit by a capital gains tax that can range from 15%-34%, explains Christiano Chagas, partner in Mayer Brown’s Sao Paulo office.