Category: Argentina

Endesa Chile has paid $50 million to CMS Generation of the US for its 25% stake in energy company Hidroinvest, which has a controlling stake in Argentine electricity plant El Chocón. The acquisition gives Endesa a 64.7% holding in the hydroelectric facility, which is located in the province of Neuquén. Prior to the purchase of the shares, Endesa held a 47.4% share in the plant.

Argentina has released its inflation figures for February, prompting more concerns over reported changes in the data calculation methodology being used by the government. Figures released by INDEC, the national statistics bureau, which has been at the center of the data doubts row, stated that February’s prices rose by just 0.3%, compared with 1.1% in January, taking annual inflation down to 9.6%. Workers groups continue to contend that January’s real inflation figure was 1.9%. The rate of inflation published by INDEC was used to calculate wage increases for workers but unions are now disputing its use and questioning the credibility of the figures being produced.

The latest joint bond offering by Argentina and Venezuela – the so-called Bono del Sur II – has attracted demand of almost 10 times the $1.5 billion on offer, according to market sources. The huge demand for the paper – which allows investors to buy the packaged bond and then resell the Argentine paper element to obtain dollars – reflects the massive appetite of local investors to acquire dollars at a rate lower than the black market. Venezuela’s stringent foreign exchange restrictions – in place since 2003 – and the huge excess of bolivars sloshing around the economy have created a huge demand for dollars. The jointly issued Bono del Sur comprises $750 million of Argentine dollar-denominated Boden 2015 paying 7.5% and $750 million of Venezuelan government TICCs, maturing in 2019, paying 5.25%.

Argentina’s Banco de Galicia y Buenos Aires has announced it will settle all its outstanding debt with the Central Bank by March 2. The Bank says it will cancel the remaining $292 million (908.7 million pesos). Meanwhile, ratings agency Fitch said on Wednesday that it had affirmed the Bank’s Individual E and Support 5 ratings and simultaneously withdrawn them. Fitch said it would no longer provide ratings or analytical coverage of Banco de Galicia.

Argentina and Venezuela launched their second joint bond on Monday, with the second offering of the so-called “Bono del Sur”. The sovereigns have upped this issue from $1 billion to $1.5 billion, comprising $750 million of Venezuela’s dollar-denominated TICCs, maturing 2019, and the same amount of Argentina’s dollar-denominated Boden 2015. Venezuela’s finance ministry said the bond would be sold at 112.6% of its face value. Venezuela and Argentina sold $1 billion of the first Bono del Sur last November.

US broadcasting firm TBS, owned by billionaire businessman Ted Turner, is to expand its investments in Argentina over the next few years, according to local media, who reported that TBS chief executive Philip Kent was due to meet President Nestor Kirchner on Monday to discuss the company’s plans. According to the company, it has invested around $25 million in Argentina over the past three years as well as buying local satellite company Imagen Satelital last year for $235 million.

Argentina’s imports rose significantly in January, cutting the trade surplus to $418 million, almost half of the amount ($836 million) recorded for the same month in 2005. According to INDEC, the national statistics bureau, imports rose by 27% during the month to $2.95 billion against a 20% drop in exports from December to $3.37 billion.

Argentina and Venezuela signed more than a dozen agreements on Wednesday covering a range of economic areas from energy to finance during the visit by Argentine president, Néstor Kirchner, to Venezuela. The two countries announced that they will launch the second tranche of their joint “Bono Sur” on Monday, increasing the size up to $1.5 billion. In energy, state-run oil company PDVSA will jointly explore with Argentina’s Enarsa up to nine oilfields in Venezuela. Also on the agenda is an agreement for the financial bailout by Venezuela of Argentina dairy producer Sancor. Last December, Venezuela offered to match a bid of $120 million by international fund Adecoagro for a controlling stake in Sancor following fierce public criticism and political intervention in Argentina regarding the proposed sale.

Venezuela and Argentina are to issue a second tranche of their “Bono Sur”, this time for $1.5 billion. The offering will include $750 million of Argentina’s Boden 2012, which the sovereign will sell to Venezuela directly, together with Venezuelan paper. Last November, Venezuela sold $1 billion of the new “Bono Sur”, jointly issued with Argentina, with demand totaling $9 billion. The bond, which was sold in Venezuela, and which could be bought in local currency via banks, comprised debt from both countries: $500 million of Venezuelan TICCs (título de interés y capital cubierto) maturing in 2017; $300 million of Argentina’s dollar-denominated Boden 2012 and $200 million of Boden 2015. Once bought, the bonds could be traded separately in the secondary market.

Argentina’s economy expanded 8.5% last year, according to figures released by INDEC, the national institute of statistics. GDP grew by 8.1% in December against the same month in 2005. Estimates for growth this year average between 7.5% and 8%, with the Central Bank projecting 8%. Government targets are more conservative, at around 4%.