The monetary policy committee of Colombia’s central bank has left the policy rate unchanged at 9.75% after their meeting Friday, as expected, citing measures it has taken to control inflation in the past month. The bank notes, however, that the inflation in February was 1.5%, more than expected, fundamentally because of rising food prices.
Category: Regions
Posted inDaily Brief
Banco de Bogota Readies COP Bonds
Banco de Bogota plans to sell COP200bn in April, CFO Maria Luisa Rojas tells LatinFinance. The notes rated AA+ on a local scale will have a maturity of 7-10 years. Proceeds are for working capital. In February, the bank’s president told local media to expect an issue of up to COP300bn. Banco de Bogota and Valores Bogota will manage the sale.
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Cemex Adds to April MXP Bond Pipeline
Mexican building materials provider Cemex plans to sell up to MXP3bn in peso-denominated bonds in April. The mxAA+ offering will include a 2018 fixed-rate tranche, and a 2010 tranche over 28-day TIIE. Cemex has not yet set the sale date or indentified use of proceeds. Santander is managing the sale. Cemex sold MXP2.5bn in 7 and 10-year UDI-denominated bonds in December via HSBC. Separately, ING Hipotecaria is heard preparing a RMBS issue of up to MXP1bn via Santander to price in April. Grupo Posadas’ MXP2.5bn sale in 2018 fixed and 2013 floating-rate notes via Credit Suisse is slated for April 1, and Infonavit is preparing to sell MXP3bn in 2030 MBS April 9 through Banamex and Deutsche. Telmex may also follow with a mixed issue of up to MXP3bn in AAA notes up to 20 years via Inbursa. Broadcaster Televisa has filed for an MXP7bn 4-year shelf.
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LatAm Equity Funds Gain
LatAm equity funds gained 3.92% during the week ended March 27, according to Lipper. EM funds rose 4.06% while China region funds gained 5.15%, close to the biggest riser of the week, natural resources, with 5.33%. Financial services equity funds had the most significant drop of the week with 1.96%, says Lipper. However, LatAm equity funds saw outflows $1.5bn in the first quarter, while Brazil equity funds lost $579m, according to EPFR Global. The drainage was more severe what was seen in the same quarter a year ago, during which the losses for LatAm and Brazil were $238m and $144m, respectively. The only EM region to actually see equity inflows in Q1 was EEMEA, which gained a thin $157m. In total all of EM lost $20bn in funds, which paled in comparison to the $69bn that flowed out of all developed markets. Meanwhile, money market funds absorbed $141bn in the quarter, demonstrating a strong flight to quality throughout the period.
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Grupo KUO Sheds Phosphate Biz
Mexico’s industrial conglomerate Grupo Kuo has agreed to sell its Quimir phosphate business to chemical firm Mexichem for an undisclosed amount. Kuo plans to use proceeds of the sale to fund projects and pay down debt. Quimir had sales of about $160m last year and specializes in the production of industrial phosphates, used mainly in detergents. Mexichem plans to spend $300m on acquisitions in the near term in Mexico and LatAm.
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UMS Brings $1.25 in Exchange Warrants
Mexico plans to sell warrants with a notional value of $1.25bn that will allow investors to exchange foreign currency debt for peso debt. On April 2 and 3, investors will be able to purchase two types of warrant that allows them to trade in 21 series of dollar, euro, deutschemark and Italian lira-denominated bonds with maturities between 2009 and 2034 for local bonds. The first warrant has a notional value of about $1bn and offers peso-denominated bonds due 2014, 2017 and 2036. The second is worth roughly $250m and offers 2017 and 2035 debt denominated in UDIs. Holders of the warrants will be able to receive their new bonds on October 9. This is the first Mexican warrant transaction to allow swapping into UDIs, as well as the first time the liquid global 2034s will be involved, according to a banker on the deal. This is the fourth sale of warrants since 2005. The government has exchanged more than $4bn in foreign-currency debt for peso bonds in the last two years. Barclays and Merrill Lynch are managing the transaction.
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Colombia Seen Holding on Rates
Analysts are predicting no change in Colombian rates at today’s meeting. A gradual slowdown of the economy and higher than expected inflation has economists betting that the central bank will stick to the current 9.75% level, though Goldman sees a small chance of a hike. “We expect it to leave the policy rate unchanged at 9.75%; with an outside chance (less than 20%) of another 25bp hike to 10.0%,” says the shop. The possibility of a rise in the benchmark is due to a recent pickup in inflation since the last meeting, to 1.51%, which pushed the annualized rate to 6.35%.
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BBVA Colombia Approves COP1.7trn in New Bonds
Shareholders of BBVA have authorized the bank to sell up to COP1.7trn ($930m) in bonds during 2008 and 2009. Proceeds will finance the bank’s working capital. Last year the bank issued a total of COP500bn, after COP800bn was approved.
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S&P Lowers Coppel
S&P has cut the national-scale rating of Mexico’s Coppel to mxA minus, from mxAA minus. The donwngrade was triggered by the retailer’s aggressive expansion plans. They include opening new stores, Coppel’s acquisition of Hipotecaria Credito y Casa and the opening of the Banco Afore Coppel, which has seen leverage increase. The issuer had been on credit watch since November, and its outlook is stable.
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Mexican Highway up for Bid
Mexico’s government has announced a MXP4.5bn highway project to connect the southern city of Oaxaca to the coastal resort towns of Huatulco and Puerto Escondido. The 283km road will finance the project with a combination of public and private investment from the new MXP270bn National Infrastructure Fund. A bidding guide will circulate next month, the government says, with a winner to be chosen by the end of the year. The government aims to have the highway completed by 2010. It expects about $2bn will be spent on 14 projects in 2008, and launched in February the Pacific Package, a follow up to last year’s highly successful FARAC toll road auction, which incorporates some existing roads and greenfield projects. The second round of FARAC toll roads will be auctioned in June, according to a banker whose shop hopes to bid.