American International Group’s will enter Colombia after its AIG Consumer Finance Unit agreed to buy Inversora Pichincha from Ecuador’s Banco Pichincha and other minority shareholders. Bogota-based Inversora Pichincha provides consumer and commercial auto loans and unsecured consumer credit. The terms of the deal were not disclosed.
Category: Regions
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Bear Tips Trinidad and Tobago Bonds
Bear Stearns is recommending Trinidad and Tobago’s bonds based on the country’s financial resilience. “We view T&T as a strong story in the current environment of risk aversion and maintain our outperform recommendation on T&T bonds,” the shop says. “Current account and fiscal surpluses, policy stability (in contrast to some other oil countries) and high oil prices should provide strong buffers against the global shocks we are currently experiencing,” Bear states.
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PR’s CRI See Breaching Covenants
S&P has cut Puerto Rico-based Caribbean Restaurants (CRI) to CCC+ from B. The outlook remains negative. “The downgrade reflects the distinct possibility that the company will breach financial covenants of its bank facility at its fiscal year-end,” says S&P credit analyst Jackie Oberoi. The fiscal year ends April 30 and the covenants become increasingly restrictive at the end of July. “The downgrade also reflects the company’s continued weak performance, which has been driven by a soft Puerto Rican economy coupled with increased labor, utility, and commodity costs,” adds Oberoi.
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LatAm Equity Investors Bag Slim Returns
LatAm equity funds gained 0.10% the week ending March 13, according to Lipper. EM funds lost 1.50%, while China region funds sank 3.16%. LatAm outperformed the world equity funds group, which meanwhile saw a pickup of 0.05%. The biggest gains were made by real estate, which climbed 3.34%, and small cap value funds with 2.36%, according to Lipper.
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Scotia Prices Wide with Jumbo Mexican RMBS
Scotiabank Inverlat priced MXP2.5bn in RBMS due 2028 at 9.15%, wide to the 8.95% it had targeted. The transaction was about 2.5 times oversubscribed, according to a banker managing the sale. The issue is the first from a MXP10bn shelf and the largest RMBS transaction in Mexico so far this year. The pool of 2,750 mortgages originated by Scotia comes from throughout Mexico, with just over a third from DF. Scotia managed the sale.
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Peru GDP Growth Seen Slowing: CS
Peru’s impressive expansion looks set to slow, according to Credit Suisse, which predicts real GDP growth of 6.5% in 2008, from 8.9% in 2007. The shop sees tightening in monetary policy and a less favorable global environment as slowing factors. Domestic demand growth will ease to 9% this year, down from 12% in 2007. A gradual decline in consumer spending growth in coming quarters could happen since consumer sentiment has gradually weakened since 2Q 2007. Private investment growth will also likely decelerate due to weaker domestic and global demand, says CS. Import growth will likely also fall this year in real terms, in tandem with domestic demand, but the change in net exports will still drag down real GDP growth by about 2.7 percentage points, the shop says.
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Advent Eyes up to $300m IPO for Milano
Private equity firm Advent International expects Mexican portfolio company Milano to be ready to go public in the first part of next year, Alfredo Alfaro, a partner at the firm’s Mexico office, tells LatinFinance. Based on analyst valuations for the sector, Alfaro predicts an offering would be worth $250m-$300m. While several banks have already approached Advent for the mandate, he says none have been selected to take the deal to market. Milano introduced its new CEO, Luz Maria Gutierrez, at an event Tuesday in Mexico. She takes over two years into Advent’s acquisition of Milano, during which the company restructured and acquired Melody, a deal completed in June 2007. Advent has $150m in equity invested in Milano, with an additional $180m in debt.
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Bear Tips Colombia Versus Panama
Bear Stearns has tipped Colombia’s 33 bonds over Panama’s 2034. “So far this month, Panama has outperformed the market by 104bp on a total-return basis,” the shop says. “Panama has historically traded 20bp wide of Brazil (1-year average) and is currently trading 18bp through Brazil.” Meanwhile, Colombia, rated by Bear as outperform, has sold off in the wake of recent political turmoil with yields on Colombia 2033s rising by nearly 40bp this month. “We consider this an ideal opportunity to add exposure to Colombia and take profits in Panama,” says Bear.
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Durango to Issue New Shares
Mexican paper producer Durango plans to raise MXP907.3m through a stock sale to existing shareholders. Shareholders have approved a proposal to sell 110.6m units at MXP8.20 each, and have 15 days to exercise the right. It last raised funds in October via a $520m bond issue, and has said it plans to repurchase some of its expensive bond debt in 2008.
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Scotia Set for Mexican RMBS Sale
Scotiabank Inverlat plans to sell MXP2.5bn in 2028 RBMS today. The notes are expected to price at 8.95%, according to a report from S&P, which gives the deal a AAA national-scale rating. The issue is the first from a MXP10bn shelf. The pool of 2,750 mortgages originated by Scotia comes from throughout Mexico, with just over a third from DF. Scotia’s own capital markets group is managing the sale.