Mexico’s government launched a $38bn infrastructure spending program Wednesday, which will see improvements in air, road, rail and sea facilities, according to the president, Felipe Calderón. The National Infrastructure Program 2007-2012, unveiled by the government, will make use of private-public partnerships (PPPs) and envisages the construction of five new seaports and three new airports.
Category: Regions
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Moody’s Rates Interacciones Sub-Debt
Moody’s said Wednesday it will assign a Ba2 long-term global local currency subordinated debt rating to Banco Interacciones’ MXP700m issue of non-convertible Tier-2 subordinated notes due in 2017. At the same time, Moody’s is expected to assign an A2.mx Mexican national scale rating to the notes. Banco Interacciones is headquartered in Mexico City providing finance to states and municipalities as well as infrastructure projects.
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Philip Morris Raises Mexican Tobacco Stake
Philip Morris is taking another 30% stake worth $1.1bn in the tobacco business of Mexico’s Grupo Carso. This takes the Swiss-based cigarette firm’s stake to 80%. Carso says it will keep a 20% stake and expects the deal to go through this year, subject to regulatory approval. “Today’s announcement demonstrates our ongoing commitment to Mexico and our confidence in the future of our business in Latin America,” says Andre Calantzopoulos, president and CEO of Philip Morris. “Our relationship with Grupo Carso and its founder, Carlos Slim Helú, has proven to be extremely successful and we look forward to further growth of our business in Mexico,” adds Miroslaw Zielinski, the firm’s president for Latin America and Canada. Philip Morris estimates total cigarette industry volume in Mexico at approximately 48bn units in 2006, with a 47.8% share for its Marlboro brand and a total market share in the country of 63.5% last year. Carlos Slim will continue to advise to Philip Morris Mexico.
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Fenosa’s EPSA Buys Colombia Hydro Plant
Colombian power company Empresa de Energía del Pacifico (EPSA) – controlled by Spanish power utility Unión Fenosa – has bought state-owned hydro-power plant Hidroelectrica del Prado for $54m (COP105bn) at auction. The plant is located in Tolima province in western Colombia.
Last month, Fenosa announced a €600m ($870m) investment in “green” energy in Mexico.
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Equity Investors Favor Asia Over LatAm
Some 35% of respondents to Merrill Lynch’s survey said they preferred Asian equity markets for the next 12 months, while none said they preferred LatAm. In the June survey, 29% tipped LatAm versus 21% for Asia. However, of the BRIC stock markets, Brazil is still way ahead, with 45% saying they prefer it over the next 12 months, compared with poor scores for Russia (-10%), India (-35%) and China (+5%). A LatAm correction looks likely, though the longer term outlook is still constructive, equity strategists say. Merrill polled 186 fund managers managing a total of $618bn for the global survey, taken from July 6-12. A total of 180 managers participated in the regional surveys, managing $447bn. The survey was done with the help of market research company Taylor Nelson Sofres.
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Panama To Launch Canal Lock Tenders
Panama is set to launch the tenders for the design and construction of the canal locks in November and will likely award the contracts by the following year. The locks are a crucial element of the $5.2bn Canal expansion project that is due to be completed by 2014. Last October, Panamanians overwhelmingly approved the plan to expand the Panama Canal and allow today’s super freighters to use the waterway. The government plans to finance the expansion by increasing tolls and issuing debt linked to canal income.
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Elektra Offers Share Buyback
Mexico’s Grupo Elektra is offering to buy back up to 8% of its shares, worth around $436m (MXN4.7bn). In a filing with Mexico’s securities exchange, Elektra said it will offer MXN238.00 a share, a 22% premium over the shares’ 20-day average. Grupo Elektra operates a network of electrodomestic outlets in Mexico, Guatemala, Honduras and Peru, as well as consumer finance.
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Bancolombia Issues $280m ADS
Bancolombia set the price for its offering of American depository shares, each of which represents four preferred shares, at $33.25. By offering 8.4m shares, the Colombian bank will raise $280m in the US. The equity sale is the last leg of a $400m balance sheet boost, started by an offering of $400m in 7.250% 2017 on May 21. That was followed by a local offering of preferred shares, closed last week, which raised $165m worth in locally listed stock. The bank then moved to the US this week, where it completed its most capital raise, bringing the total equity raised to $445m. Merrill Lynch and UBS had joint books.
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Colombia Trims Budget
Colombia is to trim almost $600m from its 2007 budget in a drive to reduce its deficit, according to the country’s finance ministry. The budget will be reduced from COP117.6trn to COP116.4trn by curbing spending plans, the government said. Of the total COP1.15trn reduction, the government will cut planned infrastructure investment by COP773bn and will reduce local debt costs by COP224bn.
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Peru Moves Earn Moody’s Upgrade
Peru’s recent moves to improve its external debt position have earned it a foreign-currency credit upgrade from Moody’s Investors Service, from Ba3 to Ba2, just two notches away from investment grade. “External debt ratios have moved towards those observed in other Ba-rated countries, while the share of foreign-currency denominated government debt and the degree of financial dollarization in the Peruvian banking system have reported steady reductions,” said Moody’s vice president Mauro Leos. Commenting on the rating, Goldman Sachs noted that it believes “Peru may earn the investment grade credit status (by at least one of the agencies) by late 2008 or 2009.” Peru is set to offer at least $1bn equivalent in new PEN-denominated bonds this week in a deal that establishes a series of milestones for the sovereign. The 2037 is the longest dated local currency deal from Peru and the sovereign’s first to get investment grade. Proceeds are earmarked for paying down some $1.8bn in Paris Club debt. Peru is already rated at just one notch away from investment grade by both S&P and Fitch (BB+/BB+). Domestic-currency government bonds – which were unaffected by this rating action – are rated Baa3.