LatAm is falling well behind Asia in using trade and foreign investment to modernize its economy and reduce external vulnerability, says S&P. “Latin American countries have had limited success in being able to insert themselves into global production chains to boost the technology and efficiency of local firms and spread such benefits into other sectors of the economy that do not engage directly in trade,” says S&P analyst Joydeep Mukherji. “Hence, they have been less successful in raising the technological sophistication of their industrial sector and gaining market share in global exports than many rated sovereigns in Asia. The poor results are reflected in their relatively weak economic structure and levels of external liquidity as compared with most rated Asian sovereigns,” he adds. But the agency says these shortcomings do not preclude continued modest improvement in sovereign credit ratings in LatAm in coming years. “However, they prevent much of the region from making the most of the opportunities that arise from globalization, constraining its overall sovereign creditworthiness compared with many countries in Asia,” concludes Mukherji.
Category: Regions
Banco Industrial Confirms Mexico Listing
Guatemala’s Banco Industrial has confirmed that it plans to go public next year. Diego Pulido, the bank’s corporate director, tells LatinFinance he has hired Credit Suisse to sole lead the IPO, scheduled to go out sometime between February and March. The offering will be done on Mexico’s Bolsa, says Pulido, and details about the size of the raise and percentage of the company to be sold are still being worked out. Proceeds are being used to fund the bank’s Central American expansion, notes Pulido. Acquisitions in Honduras and El Salvador are expected. Industrial has 28.5% of the Guatemala market by assets, according to Fitch. Industrial’s ROA (1.2% at year-end 2006) and ROE (16.8%) place it among the most profitable of the country’s large banks. The move to list in Mexico for a non-Mexican issuer is a boost for an exchange that has underwhelmed this year, especially compared to Brazil’s equity boom.
Colombia’s ISA Readies Follow-on
Interconexion Electrica has launched a follow-on offering of 53m shares, it said in a statement. The offer, run by Corporacion Financiera Colombiana, will last from Friday until December 6. ISA, 56% owned by the government, is the country’s biggest electricity transporter. Its shares closed Friday at COP7,100 ($3.47).
Citi Upgrades Mexico’s Alsea
Citi has upgraded Mexican fast food operator Alsea to buy from hold, saying it has been “severely punished” because of lower profit margin expectations next year, it says. “At the current price level, we view Alsea as a combination of value and growth, an unusual situation in recent months,” adds Citi.
Mexico’s Urbi Raises $280m
Mexican home construction company Urbi Desarrollos Urbanos has completed a $280m capital increase, selling 83.5m shares at MXP37 pesos a share. Urbi plans to use the proceeds from the share offering for strategic investments, including large development projects. BBVA Bancomer, UBS, Vector Casa de Bolsa, Banamex, Banorte, Santander, Ixe and Scotia Inverlat managed the offering.
Compartamos Sees Rise in NPLs
Mexico’s Banco Compartamos expects losses of up to MXP4m from the floods in Tabasco and Chiapas. It anticipates an increase in the NPL ratio, but not above 20bp of the total loan portfolio. Compartamos has service offices in the affected areas of the state of Tabasco. The loan portfolio there represents 5% of the total. Some 31% of the loan portfolio in the state were affected to some degree, equivalent to 1.4% of Compartamos’ total loan portfolio. “Compartamos will not suspend the granting of loans in the region,” says the bank.
Moody’s Raises Ford Mexico Outlook
Moody’s has raised its outlook on Ford Credit de Mexico’s national scale debt ratings to stable from negative. At the same time, the Baa1.mx long-term and MX-2 and short-term debt ratings were affirmed. The change follows Moody’s decision to change Ford Motor Credit Company LLC’s rating outlook to stable from negative. Ford Credit de Mexico’s debt ratings are based on irrevocable and unconditional guarantees provided by Ford Credit.
Slim Lowest on Panama Canal Locks Bids
The Panama Canal authority has received eight bids for the second dry excavation contract of the new Pacific locks access channel, with Consorcio Cilsa Minera Maria submitting the lowest. The consortium, a unit of Carlos Slim’s Grupo Carso, pitched $25.5m, $5m below Colombia’s Masering Cromas. The Authority will analyze the proposals and announce the winner in the coming weeks. The contract is part of the canal’s $5.25bn expansion.
Su Casita Buyback Falls Victim to Markets
Mexico’s Hipotecaria Su Casita has become the latest victim of whippy debt markets. The mortgage lender terminated its tender offer for the $150m in outstanding 8.50% 2016 senior notes this week, citing adverse market conditions. A peso offering to fund the buyback was said to have been in the works. Merrill Lynch was running the buyback. The aborted liability management coincides with a brutal November for high yield cross border markets that saw the death of Grupo Unialco’s $150m 7-10-year, a $275m 10-year from Mexico’s Sanluis, a $150m 2010 from Brazil’s Banco Cruzeiro, a $220m 2014 from Argentina’s Banco Macro and Cap Cana’s $500m 2017 amortizer.
TMM Chief Steps Down
Javier Segovia, the longstanding director general of Mexico’s Grupo TMM, is stepping down December 1 to pursue outside interests. José Serrano, chairman of Grupo TMM, will serve as president until a replacement is appointed. Segovia has been at TMM 12 years, during which it became a leading maritime and logistics company. “We anticipate incremental profit opportunities will occur throughout the fourth quarter that will set the stage for a very profitable 2008,” says Serrano.