Roberto del Cueto, president of the National Banking and Securities Commission, has been nominated for the vacant seat on the board of Mexico’s central bank, Banxico, by President Felipe Calderón. The position has been vacant since the end of last year when Jesus Marcos Yacaman resigned. In March Calderón’s first nomination for the post, Carlos Hurtado, was vetoed by the Senate. Del Cueto’s appointment is not expected to meet opposition.
Category: Regions
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Moody’s Upgrades State of Durango
Moody’s has upgraded the issuer ratings of the State of Durango to A1.mx (Mexico National Scale) and Ba1 (Global Scale, local currency) from A2.mx and Ba2, respectively. The action is based on the improvement in financial performance and position achieved by the state over the last two years, as well as the positive effect of the last two debt refinancings on its debt profile, according to Moody’s. Much of the improvement observed over the last two years is explained by the state’s ability to tie spending growth to that of actual revenue, as well as certain revenue measures such as increases in several tax rates.
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Susana de la Puente Resurfaces
Following a few months’ vacation in her native Peru, Susana de la Puente has resurfaced after “retiring” from JPMorgan. The veteran Andean region banker has joined The Rohatyn Group, the EM investment specialist, according to market sources. De la Puente was JPM’s country head for the Andes, Central America and Caribbean and left the bank amid a senior management restructuring that is apparently still going on. The banker, who advised Peru on its telecoms privatization in 1994, joins former client Pedro Pablo Kuczynski, who was appointed by Rohatyn earlier this year as a senior advisor. Prior to becoming prime minister of Peru in 2001, Kuczynski served as minister of economy and finance. He is charged with developing private equity investments with a focus on LatAm at Rohatyn.
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Asur Chairman Takes 20% Share
Fernando Chico Pardo, the chairman of Mexican airport operator Aeroportuario del Sureste (Asur) and the company’s main shareholder, has secured 19.9% of the stock, reports the operator. In May Chico Pardo launched an unsolicited tender offer for a majority share of the company’s outstanding stock. The offer to buy 42.6% of the company at a price of 55.25 pesos ($5.12) for each ordinary share expired yesterday, Tuesday. Chico Pardo is the founder and president of Mexican private equity firm Promecap, which bought a 24.5% stake in ITA, Asur’s strategic partner, in 2004. Asur is publicly traded on the New York Stock Exchange as well as in Mexico and was the first Mexican airport group to be privatized.
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Mexico Tax Bill Imminent
Mexican president, Felipe Calderón, is readying his tax bill for Congress, according to local media. The bill aims to improve public finances by making tax collection more effective. The government aims to boost revenues by 3% of GDP in its sexenio or six-year term. Finance secretary Agustin Carstens signaled early on that improving tax collection to help alleviate poverty would be a priority for the government in a country with one of the worst tax collection rates in the region. Calderón has been working on gaining cross-party support for the bill which hopes to break the mold of successive governments relying on oil revenues.
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Kansas City Closes $111m Loan
Mexican railroad Kansas City Southern de Mexico has closed a two-tranche $111m loan, following a May 14 $165m bond issue. The financing consists of an $81m revolver due December 31 2011 and a $30m B-tranche due June 30 2012, which will be used to refinance a 12.50% bond due 2012. The deal is being led by BBVA and Bank of America. EDC, KFW and Bank of Montreal were arrangers and Scotiabank and Comerica acted as co-arrangers. Goldman Sachs led the bond issue.
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Mexico Seen Keeping Rates on Hold
Mexico’s central bank, Banco de Mexico (Banxico) will keep the benchmark interest rate unchanged, at 7.25%, at this Friday’s policy meeting, according to a note from Merrill Lynch. Better-than-expected inflation figures will allow Banxico’s to maintain the rate while reiterating the tightening bias it announced last month. Inflation for the 12 months through May fell to 3.95% from 3.99% in April.
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Bancolombia to Sell Up To $400m In Preferreds
Bancolombia will sell 60m preferred shares to existing investors at a rate of COP15,200 ($7.95) per share – the average price of the shares over the last 100 days. The offer will be open for 15 business days and buyers can sell their right to purchase the shares to other investors. At the current price, the bank could raise up to $477m, but it will likely cap the international sale at $400m, since the aim of the sale is to provide complementary subordinated capital to match a recent $400m 2017 note offering, priced May 21. Those 7.250% bonds came at 98.661 to yield 7.064% in the transaction via JPMorgan and UBS. UBS was tapped global coordinator for the preferred share offering and Bancolombia will pick a second underwriter.
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Peru GPD April
Peru continued its stellar economic growth in April, with GDP expanding 7.25% in April year on year and taking y-o-y growth for the first four months on the year to 7.45%. The non-primary sector proved to be the strongest, with construction up 13%, manufacturing up 9.87%. The Central Reserve Bank of Peru is forecasting that GDP will expand by 7.2% in this year, while the finance ministry have predicted growth of 7.0%.
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Colombia Raises Benchmark Rate to 9%
As was widely expected by the market, Colombia’s Central Bank raised its benchmark interest rate 25bps, from 8.75% to 9%, at its monthly monetary policy meeting on Friday. This is the seventh consecutive month the bank has raised the rate. In a further move to fight inflationary pressures and to curb lending, the bank once again raised commercial banks reserves on deposits. The Central Bank is targeting inflation of between 3.5% and 4.5% this year. Inflation for the 12 months through May was 6.23%, well above that target while consumer prices for the first five months of the year rose to 4.42%.