Peru followed through with plans to pay down $838m worth of Brady debt Friday. The sovereign eliminated its outstanding amounts FLIRBs, PDIs and Discount bonds, Jose Miguel Ugarte, head of public credit, tells LatinFinance. Peru used $685m worth of proceeds from peso-denominated sovereign issuances at the end of last year to pay down the notes at par. It also used $153m from the Treasury to pay the balance, says Ugarte. The process eliminates virtually all of Peru’s Brady debt. The country still has about $50m in Par bonds that are trading at 85, which it chose not to call. Having received news of the plans to pay down the debt earlier this year, markets didn’t react to the move Friday, says one Andean strategist. The strategist notes that in general, however, the move is a welcome development that is part of Peru’s overall positive story.
Category: Regions
Scotiabank Targets $200m Syndication
Peru’s Scotiabank is looking to raise $200m through a 5-year amortizing loan. The deal through Citi includes a 2-year grace period with seven ensuing semi-annual installments. The margin is heard at 120bp over Libor, say bankers away from the deal. The deal was launched the same day Peru’s Interbank announced a $200m 3-year step up loan via Standard Chartered. That deal will offer Libor plus 80bp in year one, 85bp in year two and 95bp in year three. Earlier this year, Banco de Credito del Peru raised $410m in an upsized and repriced 3-year step up loan at 70bp, 75bp and 85bp over Libor.
Mexico Readies Airport Auction
An auction for the concession of Mexico’s Maya Riviera airport will likely take place in the coming months, according to Federico Patiño, deputy general director at Mexico’s Nacional Financiera. “We will be in the market for Maya Riviera very soon,” Patiño told LatinFinance on the sidelines of a US-Mexico Chamber of Commerce event Friday in New York. Patiño and Oscar de Buen, deputy secretary for infrastructure, are on tour to sell Calderon’s five-year infrastructure plan. Patiño said the auction for Maya Riviera will be awarded to the bidder that offers passengers and airlines the lowest tariffs. Mexican airport executives LatinFinance spoke to earlier this year say the airport project could cost $200m. Separately, De Buen declined to elaborate on the plans for location and timing of a second Mexico City-area airport, saying only that the government is still studying the situation. That project would likely cost between $3bn and $6bn, say airport executives. The two airports are among some $68bn in projects being supported by the Fonadin infrastructure fund that should eventually reach $27bn, says Patiño. Other infrastructure projects on the way include the FARAC II toll road concession that could reach $2bn, and the $8bn Punta Colonet seaport in Baja California.
Nexxus Capital Closes $142m Fund
Nexxus Capital, the Mexico-based private equity shop, has closed its Nexxus III fund with a total investment of $142m, according to Roberto Terrazas, director of Nexxus Capital. Main investors include IFC, CDC, HSBC, Export Development Canada and CMIC. The fund aims to invest in medium-size companies in Mexico, with sales of $50m-$500m, Terrazas tells LatinFinance. The investments made by Nexxus III will focus on companies that cater to the Mexican middle class in sectors like health, education, consumer goods, retail, tourism, finance and housing. The fund plans to make investments of $20m-$50m, Terrazas says.
Vene-Colombia Spat Seen Hurting: Bear
Colombia will likely suffer from the evolving crisis with Venezuela, according to Bear Stearns. If the impasse continues, the peso will likely depreciate perhaps north of COP1,950/USD, the bank says. “17% of Colombian exports go to Venezuela, and no Plan B exists to make up for those foregone revenues. The fiscal accounts and the local economy could also suffer from the current crisis,” Bear says. “If the situation of trade with Venezuela erodes further, the hit to the economy could be north of 1%”. The current forecast Bear has for Colombia is 5.7% growth in 2008. The shop also worries about inflation in Venezuela, which will likely accelerate further as the conflict persists. “We think that the risk for Venezuelan asset prices in the near future remains biased to the downside, despite the apparently compelling valuations, and despite the continued existence of a sizable current account surplus,” Bear says, maintaining Venezuela credit at underperform.
Scotiabank Passes on New Peruvian Venture
Scotiabank has informed the Peruvian authorities and Grupo Altas Cumbres (GAC), the parent company of Banco del Trabajo that it will not be exercising its option to acquire shares in the Peruvian bank, the shop announced. The Canadian bank already has a presence in the Andean country through retail banking and other financial services.
ICA Wins $100m Sempra LNG Support Contracts
Mexican builder Empresas ICA, in a joint venture with Fluor, has won a $100m contract to build a nitrogen injection plant and 26MW power plant for Sempra Energy. The two facilities will support Sempra’s Energias Costa Azul LNG import terminal being constructed near Ensenada, Mexico. The ICA projects are expected online 2010, while Sempra’s 1bn cubic-feet-a-day LNG terminal is scheduled to begin operations later this year.
BBVA Bancomer Launches BRIC Investment Fund
BBVA Bancomer has launched what it says is the first investment fund in Mexico to focus on BRICs. The fund is available for Mexican private banking costumers of BBVA and has no minimum entry amount. It will purchase ETFs in BRICs at the international quote system (SIC) of the Mexican stock exchange, to tap their high yield potential. “We are recommending our clients to keep the investment in the fund for at least year in order to get the best returns,” says Jorge Perez Samano, director of asset management at the shop. The bank expects to raise MXP500m for the fund and collected more than MXP100m on its first day, according to Perez Samano.
Novel Peruvian LNG Project Syndicating
American developers Kelley International and Ichor LNG and Peruvian sponsor Inversiones Wineca have closed an $82m 6-year construction loan for the Irradia land-based LNG project outside Lima. Lead WestLB brought in two banks to the private syndication, and seeks to bring in up to two more. The 300,000 gallons-per-day plant will receive natural gas from the Camisea pipeline, and liquefy it for distribution via trucks to industrial users who lack pipeline access. The $102m project is the first of its kind in LatAm, following similar facilities Kelley has built in the US, say the leads.
Interacciones Sees MXP9bn in Infrastructure Loans
Mexico’s Grupo Financiero Interacciones expects to finance more than MXP9bn in infrastructure projects in 2008, nearly double the amount it financed last year. The projects include public works at the federal, state and municipal levels, and owe much of their greater interest to the government’s infrastructure plan. Interacciones financed MXP4.21bn in infrastructure projects last year, including the Mexico-Toluca and Mexico-Guadalajara highway concessions, the El Cajon hydro power project, and several water treatment plants.