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.
Category: Regions
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.
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.
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.
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.
Colombia Gets $300m World Bank Loan
The World Bank has approved a $300m loan for Colombian to finance access to higher education for low-income students. The 22.5-year fixed-spread loan will support Icetex, the country’s student loan agency, to finance the enrollment of 100,000 new students in universities for 2008-2010.
Mexican Retailer Plots Share Split, New Issue
Mexican sporting goods retailer Grupo Marti plans to issue 100m new shares in a follow-on worth a total of MXP1bn. The offering on March 12 follows a four-for-one share split that will take effect March 10. In the transaction, shareholders will be allowed to purchase 0.16 new shares for each share they already own.
America Movil Hits Local Size Target
In a tough local market, blue chip Mexican issuer America Movil has priced MXP2.5bn in 2018 bonds at 8.11%. The maximum amount was reached at an auction yesterday and the coupon compares to the America Movil 8.46% of 2036 and 9% of 2016. Proceeds from the AAA locally-rated deal will go towards general corporate purposes. The offer is the fourth under a MXP10bn shelf filed last year. Inbursa, Banamex and Santander managed the sale.
Banxico Swaps $692m in Bonds
Mexico’s central bank sold MXP7.4bn ($692m) worth of peso denominated 7.75% 2017 notes Tuesday in exchange for MXP6.69bn worth of old 8.00% 2015 notes at 103.37 and MXP910m worth of 7.25% 2016 notes at 98.83. The offering is part of an ongoing effort by Hacienda to boost the liquidity of benchmarks, Alicia Nunez, deputy general director of debt issuance, tells LatinFinance. Banxico offered to swap MXP10bn, which means it succeeded in selling 74% of the total. This was significantly higher than the 17% Hacienda achieved in a February 20 offer to exchange UDI bonds. Nunez says UDIs are less liquid than peso notes, which explains the lower participation in the previous exchange.