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.
Category: Regions
Posted inDaily Brief
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%).
Posted inDaily Brief
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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Ecuador Looks at Financial Sector
Meanwhile, in Ecuador, President Rafael Correa, has warned financial institutions that he will intervene if they do not bring down the level of interest rates used. Correa said he will use the courts if necessary to achieve his aim
Posted inDaily Brief
VW to Launch Mexican Bank
The Mexican subsidiary of German car manufacturer Volkswagen is planning to launch a bank in Mexico although it has yet to lodge a formal request for authorization. The proposal to launch a bank follows recent moves by local retailers to open up their own banking units and stimulate competition.
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Crime Hinders Caribbean Development
A recent World Bank report finds that high levels of crime and violence threaten Caribbean growth and prosperity. In many countries, as crime increases, access to financing declines; spending on formal and informal security measures increases; and worker productivity drops. Reducing the homicide rate in the Caribbean by one third could more than double the region’s rate of per capita economic growth, the report estimates. Drug trafficking has driven murder rates in the Caribbean to the highest per capita in the world, and assault rates are significantly above the world average.