The Colombian Treasury will today target COP5.4trn in TES bonds through a repurchase of the paper two months before maturity. Julio Torres, head of public credit, tells LatinFinance that he expects not more than 10%-20% participation, based on the history of these transactions. He adds that the government will save 2.75% by depositing the bonds into the Central Bank. The 12% notes come due November 9. The deal is viewed as a move to free up portfolios so investors buy deals like Ecopetrol’s IPO, which becomes available to the public on September 25. “The operation should generate some fiscal savings but is also an attempt to inject liquidity into the market, which should, in our view, lower the yield on outstanding TES as institutional investors are likely to use the funds to buy other TES,” says Goldman.
Category: Regions
Mexican Airports Shut by Hurricane
Mexico’s Grupo Aeroportuario del Pacifico (GAP) Tuesday closed the Los Cabos and La Paz airports due to Hurricane Henriette. “Many of the airlines have suspended flights to the area due to weather conditions as the storm moves through the region,” says GAP. Henriette was only Category 1 strength, the weakest type of hurricane, and GAP says it expects the airports to resume normal operations this morning.
S&P Cuts TMM Outlook
S&P has revised downwards its outlook on Mexico’s Grupo TMM (B-) to stable from positive. “The outlook revision reflects the company’s delay in improving its operating and financial performance, particularly its operating and free operating cash-flow generation,” says S&P credit analyst Juan Pablo Becerra. S&P notes that a high percentage of cash flow is trapped by a $280m 20-year July ABS issue, which enhanced the debt profile but limits the ability to reduce debt. During the first half of 2007, the 20 vessels generated the bulk of TMM’s Ebitda, says S&P. It also sees inherent risks associated with the capital-intensive and competitive shipping industry. This is partially offset by TMM’s position as the largest integrated logistics company in Mexico. “The stable outlook reflects our belief that the company will maintain its current Ebitda margin level, as TMM’s operational improvements could take longer than we expected,” says S&P. “If the company can improve its operating and financial performance in the non-securitized business, the rating on TMM could be raised. The rating could be lowered if the company is unable to maintain current profitability in its non-securitized divisions,” it concludes.
LatAm Equity Fund Gains Return
LatAm equity funds in the week ended August 30 clocked in a steady 1.51% return, less than the 2.55% and 4.46% returned by EM equity funds and China Region equity funds during the same period, according to Lipper. LatAm outperformed the majority of the fund classes tracked by the service, most which were negative or came in under 1.00%. In the previous week, LatAm funds roared back with a 11.71% gain. Year to date, LatAm has given investors an encouraging 18.67%, a world of difference from the 4.42% YTD returns registered halfway through the month.
Belize-Based Investor Bids for Australian Miner
Palmary Enterprises, a Belize-based investment firm, has joined the bidding for Australia’s Consolidated Minerals (CSM). It is offering $3.95 cash per CSM share and the CSM board says it is considering the terms. The deal is better than the recently sweetened bid from Pallinghurst Resources Australia, of $3.60 cash per CSM share, which the board unanimously recommended in the absence of a superior offer. CSM has also in recent weeks received a takeover bid from Territory Resources of $2.00 cash and 1.5 Territory shares for each CSM share, subject to a 90% minimum acceptance condition. The Palmary offer values CSM at just over $900m, according to Australian press.
Cablestar Bags Bestel Assets in Mexico
Mexico’s Cablestar is taking a majority stake in Bestel for $325m, including $256m in cash and a $69m capital injection. Private Mexican telecom Bestel provides data and long distance service to phone carriers in the US and Mexico. Cablestar is 70% owned by Cablevision, which is 51% owned by Televisa.
ICA Planning Equity Issue for up to $550m
Mexican engineering and construction firm Empresas ICA said Friday that shareholders have approved a $550m equivalent capital increase through the issuance in Mexico and abroad of up to 90 million shares. The ICA board will determine timing of the transaction over a 12-month period starting in September, depending on working capital requirements. Proceeds will be used to finance existing and potential infrastructure projects and acquire land reserves for housing construction, debt repayment, and other purposes. ICA recently won a 30-year FARAC highway concession in a joint venture with Goldman Sachs. The $3.7bn equivalent deal is being syndicated by Santander.
Mexico’s OMA Launches Mini Share Buyback
Grupo Aeroportuario del Centro Norte (OMA), has launched a share buyback of MXP100m, which is part of a MXP400m program approved in April. The company runs 13 airports in Mexico and is partly controlled by Aeroinvest, an investment company which in turn is controlled by ICA. The latter recently won the rights to run the first FARAC toll road concession and the La Yesca hydro-electric facility, deals worth a combined $5bn.
Pemex Platform Financing Coming
Grupo R, a Mexican concessions operator, is preparing to take out a $600m one-year bridge loan it has secured with BBVA and WestLB with a project financing of up to 7.5 years, according to people familiar with the deal. The asset-based, charter-backed financing will help fund the construction of Muralla III, a Pemex platform, and is expected in the fourth quarter.
Colombia Builds Road to the Sun
With the IFC’s help, Colombia is drawing up its own blueprint for infrastructure finance. Local investors are rubbing their hands as the government seeks a replicable model.