Ecuador will make its next interest payment on its global bonds, due May 15, according to deputy finance minister, Fausto Ortiz. The sovereign will make an interest payment of $30.6m on its outstanding Global 2012 bonds after covering its domestic obligations, said Ortiz. Despite hinting at a possible debt default during his election campaign, president Rafael Correa has so far honored its foreign debt obligations.
Category: Regions
Posted inDaily Brief
BBVA Bancomer Hybrids to Price Today
Mexico’s BBVA Bancomer has put out price guidance on its $1.1bn in hybrid securities, which it expects to price today, Thursday. For $500m worth of non-cumulative subordinated and non-preferred 15 non-call 10 Tier I notes (A1/BBB+), due 2022, guidance is at 140bp over Treasuries. For the €500m or more in cumulative fixed-to-floating rate subordinated preferred, 10 non-call 5 Tier II notes, due 2017, talk is at mid-swaps plus 45bp. The Tier I notes are and callable in 2017 and thereafter. In year 10 they switch to floating rate and step up 100bp from the price to be determined next week. The Tier II notes are due 2017 and callable in 2012. Credit Suisse, BBVA Securities and Deutsche Bank are joint-leads.
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Cemex Seen Offering Value
Mexico’s Cemex is a surprise top corporate pick on the EMTA panel. The high grade stalwart’s recent hybrid issuance offers a significant pick up if priced to call, says Deutsche’s Milne. The perps with 5 and 10 year calls have large step-ups. “If you know Cemex, you know they never want to give investors or creditors any extra money,” says Milne. On a yield to call basis, they offer 50bp-100bp over Telmex or América Móvil. In sub-investment grade, she likes companies with restructured debt that are refinancing, like TGS, which issued Wednesday. High 7% to 8% on Argentina is seen as value. Holsberg tips the beef sector and CIE, which are also picks of Chang’s. Renfrew likes hybrid bank paper in Mexico and Brazilian airlines, TAM and GOL.
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Mexico Inflation Slows
A drop-off in consumer prices in April led to Mexico’s annual inflation falling to 3.99% from 4.21% in March, according to the central bank, Banxico. Annual core inflation also slowed, down from 3.83% to 3.66% after dropping back to 0.20% in April. This is the second month core inflation has slowed, after falling from 3.95% in February.
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Peru 1Q Growth 7.2%
Peru’s ministry of finance said Wednesday that first-quarter growth is likely to come in at 7.2%, following estimated economic expansion of 5.3% in March. The second-quarter figures also look promising, according to MEF, with estimated increases of 7.5% and 6.1% in April and May, respectively.
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Peru Raises $110.6m Through Domestic Reopening
Peru reopened its local 2020s bond issue to raise a total of 350m soles ($110.6m) in the local market on Tuesday, selling at a yield of 5.78%. Demand was heard at 550m soles. The sovereign had hoped to sell 280m soles ($88.5 million) but extended the sale in the face of the strong demand. Last month Peru raised 360m soles ($113m) from the tap of two of its local-currency bonds. The sovereign sold 270m soles in 2026s to yield 6.14% and 90m soles in 2046s to yield 3.25%. Demand for the paper was 448m soles and 274m soles, respectively. The government is authorized to sell up to 2.33bn soles of local-currency paper this year.
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Nortel Taps Barrios To Head Up CALA Region
Telecoms technology company Nortel has appointed Alvio Barrios to be the new president of the Caribbean and Latin America region (CALA), effective June 1, 2007. Barrios will report to chief executive Mike Zafirovski and will be based at Nortel’s Sunrise, Florida office. He will be responsible for sales, operations and marketing for the CALA region. Barrios replaces Martha Bejar, who is leaving the company.
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Correa Calls For Banking Regulator To Step Down
Ecuador’s president, Rafael Correa, has called on the head of the country’s banking regulator, Alfredo Vergara, to step down. The move is part of a push by the government to get private banks to lower interest rates and charges. Vergara has criticized Correa’s attempts to intervene in the banking sector while Correa has accused the superintendent of obstruction. Vergara was appointed head of the SBS by Congress in March.
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Ecuador Foreign Debt Falls Slightly
Figures just released by Ecuador’s Central Bank show that the country’s total foreign debt fell slightly in March, down 1% to $17.43bn or 40% or GDP. Public debt, meanwhile, fell 8% to $10.38bn or around 24% of GDP. And in the private sector, debt rose by 12% up to $7.1bn.
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Peru Manufacturing Up 6.5% In March
Peru manufacturing output rose 6.5% in March compared with the same month last year, according to figures published by the ministry of production (Produce) on Tuesday. Production was driven by the non-primary sector, which grew by 10.8%, against a contraction of 13.6% in the primary sector, with the largest drop seen in precious and non-ferrous metals (-21.3%).