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 − 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.
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.
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: Canal Banks on Funds
Global evaporation of liquidity has put several large LatAm infrastructure projects on ice. The Panama canal says it can continue unhindered, with the help of multilaterals.
PERU RETAIL: Dear Prudence
Expansion in Peruvian retail banking will likely be slowed by the global meltdown. But a rise in thrifts opens up new frontiers to offset contraction.
Local Investment Bank − Mexico: Citi-Banamex
Diverse for all Seasons
Most of the large institutions operating in Mexico fail to convince across all investment bank lines. BBVA Bancomer is the debt leader by volume this year, but it lacks the same commitment to M&A, as does Santander.
Best Bank − Panama: Banco General
General Still Commands
It has been over a year since Panama’s Banco General completed integration with Banco Comercial, creating a national champion with $7.2 billion in assets, 21% of the system’s private loans and 25% of local deposits. With HSBC still working to fully consolidate Banistmo, General still has a dominant position – for now. It is on this strength that the institution retains the title of LatinFinance Bank of the Year for Panama.
Best Bank − Mexico: BBVA Bancomer
Storm Protected
No one can yet be sure how much Mexico’s economy will suffer next year from the global credit mess and US slowdown. Over the past several years, its banks have lent ever more aggressively as they try to poach customers from each other and recruit from the lower-earning unbanked masses. A slowdown in lending is inevitable in 2009, with Fitch for one seeing growth of 5%-12%, after several years of rates above 20%.