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%.
Category: Regions
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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.
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Colombia PE Infrastructure Fund Takes Shape
A new infrastructure fund being set up by Julio Torres, Colombia’s former head of public credit, and other executives, is heard gaining traction among local investors. “Our target is between $100m and $150m,” Torres tells LatinFinance, adding he’s been approaching local pension funds and family offices for commitments. Full funding is expected by July and resources are to be deployed quickly, says Torres. Diligo, as the advisory shop is called, has partnered up with Nexus, a local asset manager, to form the ND Latin America Infrastructure Fund I. An advisory board for Diligo has also been established, which counts as its members Isaac Yanovich, former president of Ecopetrol; Luis Ernesto Mejia, former minster of energy and mines under Uribe; Maria Isabel Patino – a former infrastructure official for the city of Bogota – and Peter Grossich, an investment banker and principal at Nexus.
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Infonavit Sets MBS Sale Date
Mexican quasi-state housing fund Infonavit plans to sell up to MXP3bn in 2030 mortgage-backed bonds April 9. The issue is the first from a new MXP15bn program. The issue is scheduled to coincide with pension fund changes, according to a banker on the deal. The most notable alteration is the “corte transversal,” which allows division into five funds based on employees’ age group, with increasing degrees of aggressiveness. Banamex and Deutsche Bank are managing the mxAAA rated sale.
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Moody’s Affirms Mexico’s Asigna
Moody’s has affirmed Mexican derivatives clearing house Asigna at A1 on the global local currency issuer scale with a stable outlook. The agency notes that credit quality is primarily tied to that of its owners, BBVA Bancomer, Banamex, Banco Santander, Scotiabank Inverlat, and JPMorgan. The ratings are limited by the nature of a still developing derivatives market in Mexico and the fact that Asigna remains a young organization with only 10 years of operation.
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JPMorgan Wins Peru Securities Contract
JPMorgan has won a contract to provide securities services to Cavali, Peru’s central securities depository. The shop will provide custody and asset administration services to Cavali for its portfolio of global securities. JPM also provides this service to Cedeval, El Salvador’s central securities deposit. “We are expanding region to region among all different types of clients; not only central depositories but we have central banks, insurance companies, pension funds, mutual funds,” says Fabian Banchiero, product segment head for LatAm at JPMorgan Securities Company.
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Petrobras Preps Bond Revival
Petrobras is on the road in the US and Europe to patch up relations with the buyside following a controversial pullback from the market last month. CFO Almir Barbassa was in New York yesterday and Boston on Monday to meet investors and talk about financing plans, which include placing $1bn-$2bn in the US market this year, according to one sellsider who met with the executive. In February, Petrobras yanked a $500m retap of 6.125% 2016 notes. One investor says the plan is to try a new deal at that tenor again. Like most high-grade LatAm issuers, Petrobras could bring a bond any time if it is willing to pay the going rate. Petrobras was not willing to meet the market’s demands in last month’s aborted sale via Morgan Stanley and BNP Paribas. Citi, HSBC and UBS were tapped to accompany the issuer on its most recent roadshow. “The new issue premium for high grade today is 25bp-30bp over existing levels,” says a trader, who speculates an upcoming offering could reach $750m in size. Separately, Petrobras shareholders have approved a 2-for-1 share split. It will give shareholders one additional share or ADR for each they already hold as of April 25. The stock closed at BRL73.70 Tuesday.
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ICA Buys Yucatan Concession
Mexico’s Empresas ICA has acquired the Consorcio del Mayab highway concession in the Yucatan peninsula for MXP870m. It will also assume MXP2.1bn in debt associated with the project. Mayab operates the 242km Kantunil-Cancun highway running between Cancun and the state capital Merida. The 30-year concession on the toll road runs to 2020.