BPZ Resources, the US-based E&P company operating in Peru and Ecuador, has been approved to list on the Lima Stock exchange. The timing remains to be determined. BPZ does not announce any new equity capital to be raised in Peru.
Category: Ecuador
Posted inDaily Brief
Italians Consider Chilean Toll Road IPO
Italian infrastructure investment firm Atlantia has been holding meetings with Chilean investors regarding the potential IPO of toll road assets, according to market participants. The discussions are said to be preliminary at this point, especially given overall volatile market conditions, but the company is interested in floating part of its toll road package – though which roads would be involved is unclear. Credit Suisse, Goldman Sachs, Santander and UBS are said to be managing the process. Atlantia directly or indirectly owns 50% or greater stakes in 8 Chilean concessions and 1 Brazilian concession, according to its website. Earlier this year it paid $639m equivalent for stakes in 3 Chilean roads from Spain’s Acciona.
Posted inDaily Brief
Ecuador Gets Positive Outlook
In perhaps the only good news for the region Thursday, S&P raised the outlook on Ecuador’s B minus debt rating to positive from stable. “Higher levels of available deficit financing from China, combined with increased oil revenues, have allowed for greater public investment, which in turn have boosted Ecuador’s near-term growth prospects,” the agency says. It also notes relatively low external and fiscal debt burdens. An upgrade could come if the government successfully increases public investment and puts in place policies to boost private investment, including foreign direct investment. However, S&P reminds market participants that Ecuador’s recent history of default, as well as its economic policy inconsistencies, continue to constrain the rating. Ecuador defaulted on its 2012 and 2030 global bonds in 2008, resolving the matter in June 2009 through a special auction in which it repurchased the bonds at depressed levels. External market financing has been closed to Ecuador ever since the default, limiting the government’s financing options. President Rafael Correa made public remarks this week about hoping to access external markets before the end of 2012, according to wire reports.
Posted inDaily Brief
Cementos Bio Bio Sells Ceramic Assets
Subsidiaries of Cementos Bio Bio has sold its stake in its ceramic businesses in the US, Ecuador, Chile, and Peru for $67m. Cementos says the sale is in line with its decision to focus on its core businesses of cement, lime, concrete, aggregates, and mortars. Cementos does not say which parties acquired the businesses.
Posted inDaily Brief
Ecuador Gets China Loan
Ecuador has signed a $571m loan with China’s Eximbank to fund the Sopladora hydroelectric project. The 15-year loan will carry a 6.35% interest rate and a 4 year grace period. The loan represents 85% of the total cost of $670m required to fund the project. The 487MW project is one of several being built by the country.
Posted inMagazine
Healthy Targets
M&A activity in Peru’s healthcare industry is heating up. The expansion of state-sponsored healthcare insurance will be a major factor contributing to the sector’s growth.
Posted inDaily Brief
Vene, Ecuador Face Payment Difficulty: Investors
Venezuela and Ecuador are two of the EM sovereign issuers that will face the most difficulty servicing their debt in the future, according to panelists at an EMTA event. Though a default for either is not an immediate concern, the two are seen as facing fundraising challenges. “At some point, it will become complicated for Ecuador to pay their 2015 bond,” says Alberto Bernal, head of research at Bulltick. The sovereign has no access to markets and its dollarized economy makes it unattractive to lenders, as the government has no devaluation option, he says. Venezuela is popular for its high yields and buoyed somewhat by high oil prices, but could run into spending trouble ahead of elections next year. “It’s a crisis waiting to happen, at some point they will run through their balance sheet,” says Siobhan Morden, head of LatAm research and strategy at RBS. Morden does not see a balance of payment or a credit crisis in the next 24 months, but notes clear downside risks. “Our next concern is an over-leveraging in the corporate sector,” says Paul Denoon, head of EM debt at AllianceBernstein, rather than sovereign default. He does not see this as a problem within the next 12-18 months, however, noting only that EM corporates are borrowing at a concerning rate. “There are more high-yield corporate issuers than we have had in the past,” says Denise Simon, EM portfolio manager at Lazard Asset Management. She says not all of them should be borrowing and not all investors are doing their homework. All spoke on an EMTA panel in New York Monday.
Posted inDaily Brief
Ecuador Considers New Bonds
Ecuador is listening to banks’ proposals for raising new international debt, its finance minister says. While it does not need to raise funds this year, Minister Patricio Rivera says in a statement, an issuance is being considered for future budget needs. A decision would depend on market conditions and what kind of yield and maturity it could get, he adds. Ecuador had been thought to be shut out of international markets ever since a 2008 default on $3.2bn of 2012 and 2030 bonds a special government committee had declared “illegal.” In June 2009, Ecuador received 91% acceptance in a buyback offer for the two series, paying just 35 cents on the dollar. It has since funded itself through other means, including a $1.5bn 2010 domestic bond sale, a $2.2bn loan agreement with CAF, and a $2.6bn loan agreement with China’s government. Ecuador is rated Caa2/B minus.
Posted inDaily Brief
Ecuador Plans Big Infrastructure Spend
Ecuador plans to spend over $1.4bn in new infrastructure projects in 2011, according to the government. Almost half, $742m, will go toward constructing a new network of motorways stretching from the mountains to the Pacific Coast. The country is also spending $523m to fix the Manta Port. Although the government declines to comment on how it plans to fund next year’s projects, market participants say the mayor of Manta has gone on a financing trip to China.
Posted inDaily Brief
Nestle Ecuador Launches ABS
Nestle’s Ecuador unit has launched the sale of 3-year and 5-year portions of a $74m domestic bond offer, with a 7-year due next week. “This is a good time to access the market,” Santiago Noboa, Nestle Ecuador CFO, tells LatinFinance. He adds that there is liquidity available from the government pension funds and other local investors. A $20m 3-year 7.25% coupon tranche and a $15m 5-year 7.75% tranche launched Friday, and a $35m 7-year 8.25% piece featuring a 1-year grace period, and a $4m 7-year subordinated slice paying 8.75% will launch at some point next week, he adds. The sale should wrap up in the next 2 weeks, he says. Noboa says the company will aim to sell the bonds at slight premia. The deal is guaranteed by Nestle’s future sales in Ecuador and follows a $70m ABS in 2008. Produbanco is managing the trade, rated AAA.