US private equity firm Brysam Global Partners has completed a $228m minority investment in Mexican financial services provider Ixe Grupo Financiero. Brysam bought 189m Ixe class “O” common shares and now holds a 28% stake. Ixe plans to use proceeds to finance expansion.
Category: Regions
Posted inDaily Brief
Ecuador Reported Plotting Bond Swap
Mauricio Davalos, Ecuador’s minister of economic and production policy coordination, says his government is considering a bond swap that could total $3bn, according to a report by Bloomberg which cites a TV interview with Davalos. He adds that the country is concluding negotiations to borrow more money from the IDB and CAF, and doesn’t foresee the need to tap international debt markets at this time. Davalos projects the economy will expand by more than 4% in 2008, up from the 3.5% the Finance Ministry expects for this year. Moody’s estimates GDP will expand at 3.0% in 2008, down from an expected 3.5% in 2007.
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CFE Confirms ICA Hydro Project Award
Mexico’s Comisión Federal de Electricidad (CFE) has confirmed that it has awarded Empresas ICA the contract to build the 750MW La Yesca hydroelectric project in Mexico’s Nayarit and Jalisco states. This had been widely expected, after CFE announced last month that ICA’s $768m bid was lowest. WestLB is assembling a group of MLAs to provide some $1bn in construction financing for the plant. HSBC, NordLB, Banco Santander, BBVA and Citi have been invited to join the 4.5-year loan. Pricing is expected at 40bp-70bp over Libor, say people close to the deal. The structure will be similar to El Cajón’s financing, completed in 2004 through WestLB.
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Japan Bioscience Company Acquires Mexican Firm
Tokyo-based Arysta LifeScience, the world’s largest privately held crop protection company by revenue is acquiring Grupo Bioquímico Mexicano, an agro parts manufacturer, and its subsidiaries, affiliated real estate and employee service companies. Deal value was not disclosed.
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Peru Raises Rates
Peru has surprised the markets with a 25bp hike in the reference interest rate to 5.00%. The consensus view was that the central bank would leave the rate unchanged and the tightening was the second in three months, totaling a 50bp increase since July. The central bank is apparently being preemptive in fighting inflation amid surging domestic demand and higher prices for imported raw materials. Analysts expect Peruvian rates to remain stable for the rest of 2007.
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Bear Raises Jamaica, Cuts Barbados
Bear Stearns has raised its credit outlook on Jamaica, after the technicals improved following the amortization of a $225m bond, and recent amortizations of locally-issued US-dollar-indexed bonds. Also, the JLP Party, expected winner in the September 3 elections, is expected to introduce market-friendly policies. Barbados’ still-high current account deficits and limited flexibility earned it a downgrade.
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Mexico City Refinances MXP22bn in Loans
Mexico’s capital city announced this week the completion of a MXP22bn refinancing that saves it MXP1.5bn in upcoming interest payments and extends the average debt tenor beyond 30 years, from nine. The debt is mostly in loans with commercial banks, and includes a facility with a 40-year life. The city’s new lenders are BBVA Bancomer, Dexia Credito Local Mexico and Goldman Sachs, which beat out 10 other competing bidders. Meanwhile, the city has prepaid around MXP12.5bn to Santander, Banorte and Afirme, with the remaining prepayments to come in the next two months.
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Central America/Caribbean Debt Rebounds
Central American and Caribbean sovereign debt returned 0.51% in August, bouncing back from a July loss of 1.15%, according to Bear Stearns. The bank considers the performance “very respectable” given the volatility in the global credit markets. It sees the best potential in Panama, based on a strong credit and growth story, and in Guatemala, where says bonds are cheap on a relative value basis. Bear also favors the region’s prospects for weathering a slowdown in the US economy. “Our US economics team does not foresee a recession in the US, though a slowdown is certainly possible. If this plays out, we believe that the Central America and safe from a credit standpoint,” the bank says. Outperforers in August include higher-quality names like Bahamas, Panama, Barbados, and T&T. Jamaica also outperformed following a $225m bond maturity. Grenada and Belize underperformed, as did, to a lesser degree, Guatemala and El Salvador.
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Toyota Unit Files MXP5bn Local Bond Program
Toyota Financial Services de Mexico, the financing arm of the Japanese carmaker, filed Tuesday a MXP5bn 5-year revolving certificados bursatiles program to fund its operations in the country. Toyota says it has the option of issuing in pesos or UDIs, with the possibility of linking a deal to the performance of other currencies. Scotiabank and Banamex are named on the program, which is being reviewed by the CNV.
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Condor Acquires Stake in Peru Copper Project
Canada’s Condor Resources has agreed to acquire a 75% interest in the Ocros porphyry copper project in northern Peru. Condor will pay $875,000, half in cash and half in shares, and incurs exploration expenditures of at least $4m over a five year period. It also retains a right of first refusal on the vendor’s 25% interest.