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.
Category: Regions
Posted inDaily Brief
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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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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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%).
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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 To Reopen Local 2020s
Peru’s finance ministry announced on Monday that the sovereign is planning to reopen its local 2020 bonds to sell a further 280 million soles ($88.5 million). Last month Peru raised 360 million soles ($113 million) from the tap of two of its local-currency bonds. The sovereign sold 270 million soles in 2026s to yield 6.14% and 90 million soles in 2046s to yield 3.25%. Demand for the paper was 448 million soles and 274 million soles, respectively. The government is authorized to sell up to 2.33 billion soles of local-currency paper this year.
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Colombia Moves To Dampen Inflation
Colombia’s government moved to stem inflation on Monday by raising commercial banks’ reserves on customers’ deposits, which in turn will curb retail lending. The banks will now have to send 27% of new checking account deposits, 12.5% of savings accounts and 5% on CDs with maturities less than 18 months, up from levels of 13%, 6% and 2.5% before. In another measure aimed at damping down the economy, the Bank is imposing a 40% deposit requirement on all corporate and government external borrowing to slow down the inflow of dollars.
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Suramericana Struggles
In another sign that the bank market may be turning against borrowers – albeit only slightly – a deal for Suramericana de Inversiones is faltering. The Colombian investment company that owns shares in Bancolombia and Grupo Nacional de Chocolates is struggling to raise a $150m 3-year loan. The facility, described as a holding company deal backed by shares, launched at 75bp over Libor, a price many non-participants said was too tight. That figure could still be adjusted, say bankers. The deal went out to MLAs at the start of April and was expected to be completed by May. But as of Monday, lead arranger Citi still had the books open. Competing bids for the mandate are heard to have come in at between 5bp-30bp wide to the 75bp level.
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Colombia Raises Funds for Buyback
Colombia has sold $1.12bn worth of new peso-denominated bonds to fund the buyback of existing debt. The new TES bonds, maturing in 2009 and 2023, will mostly pay fixed rates of between 9.80% and 10.35%.