Ecopetrol plans to put a COP5.5trn ($2.86bn) bond shelf to an investor vote March 25. The bonds would be sold in international or domestic markets. The oil producer, which is 89.9% owned by the Colombian government, had COP8.8trn approved this time last year, and the COP5.5trn amount represents the remainder following last year’s blowout $1.50bn 2019 debut bond in international markets. A local issue considered to follow last year was put off after Ecopetrol secured $500m more than expected through the dollar deal, on some $9bn in orders. Proceeds from the new bonds will fund international investments, as the company looks to meet $6.93bn in capex this year. In January, the company said it planned to raise up to $3.50bn through various instruments in international markets in 2010. It secured that month a preliminary loan commitment from the US Exim bank for $1.00bn.
Category: Regions
Grupo Carso Sets Up Investment Fund
Mexico conglomerate Grupo Carso has set up a MXP3.5bn investment fund known as Enersa, run by Telmex board member Jaime Chico Pardo, according to a statement from Chico Pardo’s office. The fund will invest in health and energy companies and is already considering providing growth capital to Mexican companies such as Selmec, Hubard & Bourlon, Optima Energia, Laboratorios Medicos Polanco, and Laboratorios Clinicos Puebla. Grupo Carso holds a 60% stake in Enersa and Chico Pardo the remaining 40%.
Uribe No-Go Won’t Affect Colombia Economy
Colombia’s economy should not see any material impact from a court decision that bars Alvaro Uribe from running for a third term as president, say local analysts. Jose Fernando Restrepo, financial sector analyst at Medellin-based Interbolsa, says that whoever becomes the country’s next president is unlikely to stray from the 2 focal points of Uribe’s presidency: security and attracting FDI. He forecasts the country’s GDP will grow 3% in 2010. Another analyst who asks not to be identified says Uribe’s efforts to improve safety and enhance financial regulations will likely be continued. “It would be suicide for the next president to undo what Uribe has achieved,” he says. Colombia holds legislative elections March 14 and presidential elections May 30.
LatAm Well Positioned for External Shocks: Investors
As trouble continues to brew in Europe, investors are still broadly positive on Latin America’s ability to resist the impact of events like fallout from a Greek bailout. “There will be additional validity coming out of [the Greece situation]. But at the end of the day, I think the Latin countries are in very good shape fiscally and monetarily,” says James Barrineau, global economic research analyst at Alliance Bernstein. “EM sovereigns are in a better position than their developed counterparts from a fiscal and leverage perspective, as well as from a growth perspective, and that is reflected in the spreads,” says Shamaila Khan, managing director at TIAA-CREF. However, she notes that the asset class is not immune to global risk aversion, and there could be knock-on effects from stalled recovery in the developed world. In the longer term, a fall in commodity prices poses the greatest threat, particularly to the region’s corporates. As for political risk, Barrineau finds warnings of volatility relating to Brazil’s elections “probably overstated” by the sell-side, and says either of the 2 main candidates can be broadly expected to continue the current economic policies. In Colombia, Khan adds that a decision barring Alvaro Uribe from seeking a third term “bodes well for institutional stability.” Both spoke at a Fitch Ratings panel Tuesday in New York.
Comerci Extends Exchange
Tiendas Comercial Mexicana has again extended the period for its local debt exchange offer, to March 17 from March 2. Parent Controladora Comercial Mexicana seeks to extend its maturity profile as it recovers from crisis-related derivative problems. The retailer is offering holders up to MXP1.5bn in new 2016 notes in exchange for 5 series of outstanding bonds with nearer maturities. The new bonds are rated BB on a national scale and should be issued following close of the offer. Comerci has not indicated the acceptance rate to this point. Ixe is managing the transaction, launched January 5.
America Movil Breaks Mexico Ice
America Movil has priced the first large non-government corporate bond in Mexico’s domestic market this year, raising almost MXP15bn at better rates than Pemex. A MXP4.60bn 5-year tranche pays TIIE plus 40bp, a MXP7.00bn 10-year pays 8.60%, and a MXP3.28bn 15-year UDI-denominated piece pays a fixed 6.20%. Demand topped MXP18bn, according to bankers managing the sale. It came from a variety of investors including private banking, insurance companies, mutual and pension funds. The 2015 floater priced at the low end of initial investor expectations, which ran from about 40bp to 75bp, while the 2010’s spread of Mbono plus 95bp was in line with 75bp-100bp expectations. The UDI-denominated tranche was larger than the up to MXP2bn expected, as the issuer opted to increase it at the expense of the TIIE tranche, says a banker on the deal. America Movil had planned to issue up to MXP15bn, including up to MXP6bn in a 5-year floater, up to MXP7bn in a 10-year fixed rate note. The UDI deal was expected to be privately placed with a handful of investors. Banamex, Inbursa and Santander managed the sale, rated AAA on a national scale. The 3-part sale will be followed by a dollar issue this year, after roadshows in Q2. The issue is the first from America Movil since it announced it will take control of Carso and Telmex via M&A expected to forge the world’s third biggest telecom. In the only other large issuance in what has been a slow-starting year, Pemex sold MXP8bn in 5-year floating-rate notes at TIIE plus 70bp, MXP5bn in 10-year at 9.10%, and a 10-year MXP2bn UDI piece at 4.20%. Though Pemex spreads have improved since the sale, bankers on and away from the deal say the new America Movil bonds generally have priced through the Pemex curve. America Movil has indicated it may follow the peso bonds with issuance in dollars and other currencies later this year. The next large transaction in the Mexican bond market should be an up to MXP5bn deal from state utility CFE.
Peru Railroad Investment: Funds Spring Up
New infrastructure funds are springing up to finance billions of dollars in Peruvian railroads. The government hopes to also see investment from commodity producers.
Colombia Infrastructure: Funds Accumulate
Colombia’s multiple infrastructure dreams look closer to becoming a reality as all the talk of the last few years moves closer to action.
Colombia Capital Markets: Off Peak, But On Track
This year may not see the record-breaking flow of local bonds Colombia enjoyed in 2009. But brisk activity is expected as liquidity persists and investors continue to seek assets.
Samurai Bond Market: LatAm Issuers Return
Sovereigns have returned to Japan for diversification at an attractive rate. Corporates are another matter and the scope of the Samurai market remains to be seen.