Mexican coke bottler Embotelladora Arca has agreed to purchase Grupo Guerrero, owner of Coca Cola bottling rights in northwestern Argentina. The amount of the transaction was not disclosed but was above $10m, according to Carlos Beltran del Rio, manager of investor relations at Arca. “We are looking at expansion opportunities outside Mexico,” he says, adding that there are few Coca Cola bottlers for sale. The deal should close in the next 6-9 months, after which Arca expects to offer new products to the Argentine market. The franchise includes the provinces of Catamarca, Jujuy, La Rioja, Salta, Santiago del Estero and Tucuman. It sold approximately 80m cases in 2007.
Category: Regions
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Fortuna Silver Mine Tipped by Hallgarten
Hallgarten has issued a strong buy recommendation on Canadian miner Fortuna Silver Miner, which operates the Caylloma field in Peru and San Jose in Mexico. “On face value alone, the company is an interesting option as a vehicle to ride the secular bull run in both base and precious metals, as it has strong expansion plans [and] has cash to fund the operations with little or no need to go to the currently tight credit market for funds,” the shop says. It adds that the company is investor-friendly for its share structure and policies. Hallgarten also highlights the potential of its Peruvian operation.
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Fitch Drops GMAC Debt to BBB+
Fitch Ratings has lowered its debt ratings on bonds from Mexico’s GMAC Hipotecaria to BBB+ from A+, it said. The downgrade, affecting MXP2.15bn in three issues, follows the recent downgrade of parent Rescap to BB minus from BB+.
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Andean Crisis Deepens, Bond Slide Slows
Andean bonds continued to underperform Tuesday as the diplomatic crisis between Colombia, Venezuela and Ecuador deepened, though the decline in prices has slowed. The Vene 2027 closed at 97.13, down from 97.52 Monday, according to MarketAxess, while the 2014 finished at 96.00, down from 96.83. The 2027 lost two points in the previous session. Colombia 37 dropped a point to 105.30 Tuesday, while Ecuador 30s traded at 96.82, versus 97.29 in the previous session. It is unclear how the storm will impact the markets in the long run. “If there is a disruption in trade for a day or for a week it is not very relevant,” says Carola Sandy, analyst at Credit Suisse. “The risk comes from a long lasting disruption of trade. I don’t think that this is likely because it is not in the best interest of any of the two countries,” she adds. Ecuador has been clearer in its role, as president Correa has formally severed diplomatic ties with Colombia, but made specific remarks about not cutting economic links, Sandy adds. “Chavez has assumed bellicosity in a situation in which Venezuela has nothing to win,” says Francisco Gonzalez Cruz, rector of Venezuela’s Universidad Valle del Momboy.
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Scotia Preps Mexican MBS
Scotiabank Inverlat has registered to sell MXP2.5bn in 2028 RBMS. The AAA locally rated fixed-rate notes are expected to price March 13 at the earliest. 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 one-third from DF. Scotia’s own capital markets group is managing the sale.
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Mexico’s Posadas Readies Peso Bonds
Hotel and tourism operator Grupo Posadas is preparing an issue of MXP1bn-MXP1.5bn in bonds. A sale date still has not been set for the deal, heard to include both 2018 fixed and 2013 floating-rate tranches. Proceeds are for general corporate purposes. Credit Suisse is leading, with Ixe, BBVA, JPMorgan and ING as co-leads.
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Invex Preps Acapulco Tunnel Revenue Securitization
Mexico’s Invex bank is preparing to place MXP1.25bn in 2033 bonds backed by revenues generated by the TUCA tunnel concessionaire in Acapulco. The definitive date has not been set, but a sale of the AA+ rated notes linked to the 182-day TIIE could occur as soon as March 14. TUCA has operated the Tunel de Acapulco under a 40-year concession since opening in 1996. The last TUCA securitization was an MXP800m issue in 2005. Value Casa de Bolsa is managing the sale.
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Peru Seen Holding Rates Despite Inflation
Peru’s central bank is expected to keep the overnight rate at 5.25% after its monthly board meeting Thursday, despite the high probability that February’s inflation could be higher than forecast, according to Citi. The shop sees food likely to affect Peru’s inflation more than in other countries, given that it accounts for 47.5% of the CPI basket, versus a 26% regional average. This has the potential to encourage generalized inflationary pressures and will likely reduce the probability of reaching the inflation target this year. Citi believes that the likelihood of a rate hike in the next meeting is small, but does not rule out additional measures in the coming months.
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Mexico to Swap MXP10bn Bonds
Mexico’s central bank is planning to swap up to MXP10bn in 7 and 8-year bonds for new 9-year notes. In an auction set to take place Wednesday, it will buy back the 8.00% of 2015 and 7.25% of 2016 bonos, denominated in both pesos and UDIs. Holders will receive 7.75% notes maturing in December 2017. The transaction follows Mexico’s first UDI bond exchange February 20, in which it bought back about $184m in 2025s and issued 2035s.
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Chavez Saber Rattling Knocks Bonds
Venezuela’s increasingly heated diplomatic row with Colombia has dented secondary bond markets, where both sovereigns underperformed Monday. The Vene 2027 closed off two points at around 97 down from 99 on Friday, according to traders. Colombia 2037s meanwhile dropped 1.5pts to 105, while PDVSA 2017s surprised by outperforming the Vene sovereign, closing up around 3pts at 67. Ecuador, which also weighed in against Colombia in the spat, was seen trading lower. The Vene local market meanwhile saw significant flow. “A lot of people were looking for cash,” Abramo Di Luca, director at Italbursatil Casa de Bolsa in Caracas tells LatinFinance. “There was a lot of nervousness”. The government nonetheless continued today with the sale of notes in US dollars from a pool of debt including the Argentina and Ecuador sovereign. The bonds are highly sought after by Venezuelans desperate for hard currency. “I really think that the market will adjust itself again,” Di Luca says. “But is important to see the attitude and the explanation of the government in the coming days.” The storm is expected to eventually blow over, though there is risk of further escalation short term.