The Bolivian government took control Thursday of four energy companies and a telecom, according to ABI, the state information agency. By decree of president Morales, Bolivia took over the 51% of oil company Chaco and pipeline builder Transredes and 100% of previously privatized oil storage and distribution company Compania Logistica de Hidrocarburos Boliviana (CLHB). An agreement was reached, however, with oil company Andina to purchase 51% of its stock for $6m, according to ABI. Previously, the Bolivian government had a 48% participation in Andina and Chaco and 34% in Transredes, ABI adds. The takeovers come after a lengthy process of negotiations between the government and the energy companies, which had a deadline of April 30 for that process to conclude, says Casey Reckman an analyst at Fitch. “[The nationalizations] just contribute to the deteriorating investment climate that we’ve seen in Bolivia,” Reckman says. There has been a lot of uncertainty in the hydrocarbons sector in Bolivia since Morales took office, she notes. These actions will further impair Bolivia’s ability to attract foreign investment to the oil sector. “From the perspective of credit worthiness, “[nationalization] is not a positive trend,” adds Reckman. Morales also decreed the nationalization of Entel, Bolivia’s telecom company, partly owned by Italy’s Euro Telecom International. The government already controlled half of that firm.
Category: Regions
Colombia Sees Minimal Inflation Increase
Colombia’s inflation was 0.71% in April, according to the country’s statistics bureau. The number is less than the 0.90% price hike of April 2007. However, the inflation picture is still far from comfortable, according to Goldman Sachs. “Of particular concern is the fact that core, non-food inflation continues to accelerate 4.74% yoy in March and moved outside the 4.5% upper limit of the inflation target band for the second month in a row,” says the shop. Although US activity has decelerated significantly, there are no visible signs of contagion in the Colombian economy, Goldman adds. “In addition, the terms of trade have reached historically high levels; trade flows remain strong, and the confidence of foreign investors in the Colombian economy remains firm as demonstrated by strong FDI flows year to date.” All the above suggest that the central bank is likely to leave the policy rate unchanged at 9.75% in May, Goldman adds. Analysts see strong FDI propping up the COP for the foreseeable future.
Banco Industrial Hybrid Details Emerge
Guatemala’s Banco Industrial priced an offering of Tier 1 capital securities worth $30m. The issue, cloaked in secrecy at the time of pricing last week, is made up of 60-year non-call 10 debt securities that switch from fixed to floating-rate notes in year 10. In the first 10 years, they pay an annual coupon of 9%. In year 10, if not called, they jump to Libor plus 600bp, a figure that was calculated by adding the April 25 10-year Libor spot rate of 450bp to a spread of 150bp. The notes, which priced at par, are rated Ba3/B+/B+, and get 100% equity treatment. At 9%, the transaction was seen as aggressive, especially versus higher-rated hybrids from US commercial banks in the past two months, which were done at 8%-10%. That partly explains the smaller size of the deal, says a banker close to the process. Credit Suisse led and Guatemalan investors were among the buyers.
Peruvian Exporter Gets Term Loan
Peruvian fishmeal and fish oil producer Pesquera Exalmar has closed a 6-year $80m export-backed term loan, its first in the international market. The facility is secured by assets including vessels, licenses and processing plants, as well as export receivables from customers in Germany, Japan and China. It pays Libor plus 350bp. The unit of Corporacion Exalmar will use proceeds to pay down debt and fund its purchase of 50% of rival Corporacion del Mar for an undisclosed amount. WestLB arranged the loan, which included as participants BNP Paribas, Citi, Rabobank, Natixis and Israel Discount Bank.
Ecuador Underscores Ability to Pay
by Julio Urdaneta Though willingness to pay may always be a question for investors in Ecuador, ability to pay is far from a problem, owing to record oil revenues. The […]
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