The World Bank has approved a $370m loan to Peru, the second in a series of up to four supporting government initiatives for efficiency in public spending and improved competitiveness. The fixed-spread loan is available on a drawdown basis, and repayable in 21.5 years, including a 13.5-year grace period. The first $200m loan in the program was granted in December of 2006. Separately, the bank approved loans of $35m and $40m to Panama to support government programs to increase the quality of health services and education in rural areas. Each 20-year loan features a 5-year grace period. The bank did not disclose pricing.
Category: Regions
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ArcelorMittal to Build $600m Mill in Mexico
Steel operator ArcelorMittal is planning to build a $600m steel mill in Mexico, the company announced. The new facility, which is expected to have a capacity of 1m metric tons of billet per year and a new bar rolling mill with a capacity of 500,000 metric tons, will produce carbon steel and bars including rebar, merchant bar quality and special bar products to serve the construction and automotive sectors, the company adds. ArcelorMittal is evaluating potential sites for the mill in Mexico as it ponders factors like logistics, supply chain and availability of resources to operate the plant, it says.
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Colombia’s Suramericana Plots ADR
Colombian investment holding company Suramericana de Inversiones is mulling options for a bank to lead an ADR listing on NYSE, a company spokeswoman says. The Suramericana board approved Thursday the listing of Level I ADRs. The spokeswoman adds that no new shares will be issued.
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Bolivian Bank Plots Subordinated Dollar Bonds
Banco Nacional de Bolivia is planning to issue $10m subordinated bonds. The rare Bolivian issue will have a tenor of 6 years, according to Moody’s, which gives the issue B2 global- and Aa3 national-scale ratings. The transaction is a first from the bank’s $20m subordinated debt program. Banco Nacional, headquartered in La Paz, had assets of BOB7.7bn and deposits of BOB6.9bn, as of June 30, says Moody’s.
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GCC Loan Still Far from Finish Line
Less than a week before the commitment deadline for a $200m 5-year loan, Mexico’s Grupo Cementos Chihuahua (GCC) is heard facing resistance from prospective participants. The amortizing deal, which pays Libor plus 125bp, has not gained the desired traction owing to a number of exogenous factors, say bankers close to the process. Appetite for the deal led by BBVA is dampened by general markets uncertainty, which forces credit committees to be more selective, as well a cement sector concerns. “Some of it is spillover from the sector,” adds a banker involved, noting that while GCC has reported strong figures, its peers like Cemex have had sub-par performance recently. A 5-year tenor is also tough, says a banker away from the deal. ABN AMRO is heard to have taken an MLA ticket, while Wells Fargo and Barclays appear to each have taken small pieces, of $20m or less.
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S&P Cuts Mexican Auto Lenders to Junk
S&P has chopped the national-scale credit rating on GMAC Mexicana to BB from BBB minus. The action follows the downgrade of parent GMAC to B minus from B and reflects liquidity problems at parent General Motors caused by a decrease in sales. The agency also cut fellow lender Ford Credit de Mexico to BB from BBB minus. The action follows the lowering of parent Ford Motor to B minus from B, also due to weaker sales. The outlook for both is negative.
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Morgan Stanley Hires for Mexico HNW
Morgan Stanley has hired Juan Dibildox in its Miami private wealth office to cover high net worth clients in Mexico. Dibildox will report to Jon Mallon, executive director and manager of the private wealth office in Miami. He was previously financial advisor at Lehman. Morgan Stanley this week announced the hiring of a team of four, including Ruben Lerner and Manuel Uranga to serve high net worth clients in LatAm, particularly Venezuela.
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China Gets Rating Boost
Good credit rating news from China gives a boost to LatAm bulls who see trade linkages with Asia – particularly commodity demand – supporting the region through a downturn in the US and Europe. S&P raised China to A+ (stable) from A, motivated by an improving fiscal and external position. “These improvements to the government balance sheet will offer greater resilience to deal with the shocks of a potential sharp economic downturn,” says S&P analyst Kim Eng Tan. The agency also notes China’s strong external asset position, exceptional economic growth potential, and continuing improvement to the government’s financial position. Risks include balance sheet damage in an abrupt and prolonged economic slowdown arising from banking sector distress, exacerbated by policymakers’ reliance on administrative tools for macroeconomic management.
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Citi Takes Universal Bank Approach to LatAm
In what it being dubbed a renewed commitment to LatAm, Citi says it is shifting its organizational structure in the region to employ a universal bank model it claims to have established in Mexico. The bank is naming country and regional heads to oversee the institution’s entire corporate and retail banking operations in each area. In Brazil Gustavo Marin will continue as CEO of Citi Brazil. In Central America and the Caribbean, Raul Anaya replaces Mauricio Samayoa as head of the two geographic areas, while Fernando Concha is named to lead South America excluding Brazil.
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Gigante Seeks Control of Home Depot Mexico
Mexican retailer Grupo Gigante has offered to buy the 50% it does not own of Office Depot Mexico for $430m. With the offer, Gigante expects to also obtain rights of expansion in LatAm for the Home Depot franchise, it says.