Cemex, once one of LatAm’s bluest of industrial blue chips, has lost its investment grade rating from Fitch. The agency has downgraded the Mexican cement maker to BB+ with a negative outlook, from BBB minus, citing high leverage levels, reduced liquidity and weaker than expected operating results. “While the company has been able to reduce debt by close to $3.0bn since the Rinker acquisition, leverage remains higher than originally anticipated,” says Fitch. On September 30, Cemex had total adjusted debt of $23.3bn. Cemex’s liquidity position is also tight: it faces maturities of $5.7bn next year, notes Fitch. Still, some investors view the credit as a solid name to be holding. “I don’t have any fears that they are going to default,” says one buysider, noting that the rash of recent downgrades in LatAm simply means tighter covenants and more secured issuances going forward.
Category: Regions
Best Bank − Colombia: Banco de Bogotá
Mighty Challenger
The executive suite of Banco de Bogotá’s headquarters has one of the best views of Colombia’s capital. Alejandro Figueroa Jaramillo, the bank’s president, has just delivered first half performance figures to the board, which includes members of Grupo Aval, the majority owner of the bank and Colombia’s largest financial conglomerate. As he sits down for a rare interview – his aides say Figueroa does not speak to local press – he is interrupted by an urgent note from his assistant.
Best Bank − El Salvador: Banco Agrícola
Bridge to Salvador
Banco Agrícola is the centerpiece of Bancolombia’s strategy to establish a meaningful presence in Central America. The May 2007 purchase earned the Colombian powerhouse a solid footprint in a highly sought after region, and just in time.
Best Bank − Jamaica: Scotiabank
Finding Growth
Competition is tight at all ends of Jamaica’s banking market. The system’s two largest, Scotiabank and National Commercial Bank (NCB) were nearly level in assets as of mid-year, with 287 billion and 280 billion Jamaican dollars, respectively. Profitability was also close, with Scotia claiming an ROE of 25.61% and NCB 29.54%, as of the end of July and June, respectively
Best Bank − Bolivia: Banco Mercantil Santa Cruz
BMSC Wrestles Conflict
Banco Mercantil Santa Cruz (BMSC), Bolivia’s biggest bank, says the recent social unrest has not yet impacted on the economy or the banking system. However, the bank, which has 235,000 clients and 57 branches throughout Bolivia, believes that could change.
Best Bank – Trinidad and Tobago: Republic Bank
Energizing the Base
After an unsuccessful foray into the Dominican Republic, Republic Bank has curtailed regional expansion plans and is focusing on Trinidad and Tobago. It sold its Dominican assets to BHD in October 2007 and has since greatly improved risk management.
Best Bank − Ecuador: Banco Pichincha
Bucking the Trend
Ecuador’s Banco del Pichincha is clinging on to a AA+ rating from Fitch subsidiary Bank Watch Ratings, despite global financial crisis and a government that many foreign investors would not have on their shopping lists. In fact, Bank Watch lists political risk as one of the main threats to Pichincha.
PANAMA REPORT: Stiff Upper Lip
Panama is defiant in the face of the global storm. However, inflation is a problem and its positioning as a hub may end up backfiring.
STRUCTURED FINANCE: Playing with the Variables
Despite horrific market conditions plaguing every brand of issuance, Mexico has seen recent flow that demonstrate limited signs of life.
PANAMA REPORT: Spending in the Balance
The canal seems a done deal, but Panama has plenty of other infrastructure projects lined up. Amid crisis, some may not see the light of day.