As widely expected, Mexico’s central bank has left its monetary policy rate at 4.5%. Bulltick believes the bank will keep rates at this level for the rest of the year on the back of a massive output gap and an appreciating currency, which mitigate inflationary pressures from tax and prices increases. “The economy is emerging from a significant recession and the central bank is unlikely to tighten monetary conditions as the economy gains traction,” it adds. Goldman Sachs also believes the rate will stay at 4.5% for the rest of the year. “The [central bank’s] statement conveys the notion that it is comfortable with the behavior of inflation expectations for the medium and long-term, which are well anchored,” Goldman adds.
Category: Regions
Posted inDaily Brief
Bancolombia Leasing Plans Bond Issue
Bancolombia Leasing is planning to issue up to COP400bn ($207m) in local bonds with terms ranging between 18 months and 10 years, the company says. It adds that the notes will pay a spread over IPC or fixed rate, and proceeds will go to strengthen its investment portfolio. The borrower is the leasing unit of Bancolombia, the largest bank in Colombia.
Posted inDaily Brief
No Changes Seen for Mexico Rates
Market consensus points to Mexico’s central bank leaving the monetary policy rate unchanged at 4.50% today. Morgan Stanley says that despite higher-than-expected January inflation of 1.09% month-over-month, the authority is likely to keep rates level. Credit Suisse says the bank will likely hike the overnight rate by a cumulative 100bp in late 2010, in four adjustments of 25bps each. Bank of America-Merrill Lynch believes any hike will come in the second half of the year.
Posted inDaily Brief
Interbolsa Plans Bond Sale
Colombian investment bank Interbolsa says it is planning to issue COP120bn ($62m) in local bonds in late March or early April. The AA+ rated issue will have a 4-year term and be made in 3 series, one paying a spread over IPC, another over DTF and another one paying a fixed rate. The company says proceeds will be used to refinance debt and to finance its acquisition of Brasil’s Finabank, which it bought for BRL36.3m in November, and other investments. Esfinanzas is managing the issue.
Posted inDaily Brief
Peru Securitizer Readies RMBS
Titulizadora Peruana plans to sell Monday its first ever mortgage-backed security offering, according to officials. The securitization specialist owned by Titularizadora Colombiana has been pitching the deal worth up to $35m to local investors. The 20-year paper, backed by mortgages from BCP and Interbank, has an average life of 9 years and will pay fixed rate. The bond is dollar-denominated to match the currency of the loans. Subordinated bonds will represent about 6% of the issuance. BCP’s Credibolsa unit and Inteligo are placement agents for the deal, rated AAA on a national scale.
Posted inDaily Brief
Mexico GDP Outlook Brightens
Mexico’s finance ministry has improved its outlook for GDP growth in 2010 to 3.9% from 3.0%, as non-oil exports, domestic demand and activity in manufacturing, commerce and transportation show signs of rebounding. “The new forecast is in line with those of private sector analysts and international entities, which agree that the Mexican economy will grow more than previously expected in 2010,” says the finance ministry.
Posted inDaily Brief
Findeter Places Credit Deposit Notes
Colombian state-owned development finance agency Findeter has placed COP300bn ($155m) in credit deposit notes via a Dutch auction. It sold COP100bn in a 2-year tranche paying DTF plus 1.08% and COP200bn in a 5-year tranche paying IPC plus 3.92%, says financial officer Fredy Vivas. He adds that total demand clocked in at COP679bn. Findeter structured and managed the operation itself.
Posted inDaily Brief
RBS Shedding Colombia Unit
Royal Bank of Scotland (RBS) is in advanced talks to sell its Colombia unit and an announcement should be made soon, says a spokesman. RBS’s presence in Colombia is not significant, as figures from the local financial regulator show that it has less than a 0.25% market share by assets. RBS Colombia’s assets were around $247.80m at the end of 2009. A Bogota-based equities analyst who covers the local banking industry thinks that a deal could be worth $50m-$75m and says that most likely buyers are international banks with local exposure, such as Citi, HSBC, Santander and BBVA. The RBS spokesman says that there are other LatAm operations that the bank has identified as being “non-core” and could possibly be divested too. The bank has assets in Argentina, Chile and Venezuela. RBS is divesting non-core assets globally. For instance, RBS Sempra Commodities says it has agreed to sell its metals, oil and European energy business lines to JPMorgan for $1.7bn.
Posted inDaily Brief
Ecopetrol Seeks $3.5bn in 2010
Colombian state-controlled oil producer Ecopetrol plans to raise as much as $3.5bn in the international markets this year. The company plans to make use of bond markets, credit facilities, multilateral and export-import loans, as well as the possible sale of non-strategic assets to help fund $6.93bn in 2010 capex, CEO Javier Gutierrez says in a conference call. Subsidiaries should need to raise up to a combined $2.3bn this year, and will do so themselves, he says. They include oil producer Hocol, the Refineria de Cartagena refinery, petrochemical unit Propilco, and pipeline operators Ocensa and ODL. Ecopetrol secured a preliminary loan commitment from US Exim in January for $1.00bn. Bond investors anticipate a follow up to the $1.5bn in 7.625% of 2019 bonds Ecopetrol sold last year via a well-received dollar debut.
Posted inDaily Brief
Pacific Rubiales Readies Credit Facility
Pacific Rubiales has named BofA-Merrill Lynch as lead arranger for an up to $200m credit facility. The Canada-based oil producer operating in Colombia expects the syndicate to be made up of both Colombian and international lenders. The facility would replace existing smaller facilities, and the borrower does not expect to fully draw it down in 2010. Pricing will depend on ratings from S&P and Fitch, it says. The joint operator of the Quifa block in Colombia’s Llanos Basin raised $450m in November through a 8.75% 2016 bond, rated BB minus/B+, and $258m in a warrant exchange offer last month. Rubiales has about $615m in debt, according to Barclays Capital, which expects at least some of the facility to be drawn this year. “While we believe ratios could potentially deteriorate if the full capex program is implemented and production targets are not reached, we believe that the recent warrants transaction and cash on hand are likely to cover most of the needs,” the shop says, noting that the outlook remains positive.