Luis Alva Castro has been named the new interior minister of Peru. His first move following his appointment was to announce the creation of external committees to manage certain public purchases. He replaces Pilar Mazzetti who resigned following allegations of irregularities in the acquisition of police vehicles by the ministry, although there was no suggestion of personal involvement. Alva Castro served in Alan García’s first government (1985-1990), before running as a presidential candidate for APRA in 1990.
Category: Regions
Posted inDaily Brief
Banxico Holds Rate Unchanged
In line with market expectations, Mexico’s Central Bank (Banxico) held the benchmark interest rate unchanged on Friday at 7% and warned that an increase would be on the cards should core inflation not fall after next month. The Bank’s tougher line is in response to the significant rise in core monthly inflation in January to 0.50%, driven by certain food prices, and which risks spreading across into other sectors.
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Mexico’s IMSA Lines Up $1.6 Billion Stock Repurchase Loan
Mexico’s Grupo IMSA, the steelmaker, has launched a $1.66 billion stock repurchase loan at bank meetings in New York and Monterrey. The financing comes in three parts: two 5-year term loans of $1.3 billion and $110 million each and a $250 million 3-year revolver. Pricing out of the box is Libor +85 basis points on a leverage grid, whereby an increase in leverage to 3.25x-3.75x adds 15 basis points increase and a drop to a 2.25x-2.75x decreases it by 15 basis points. The deal is secured by company stock. Calyon is global coordinator and bookrunner with BNP, Citi and ING as joint bookrunners. MLAs include ABN Amro, BBVA, Santander, Scotia Capital and Unicredito. The deal closes March 23.
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Carrasquilla To Step Down March 7
Alberto Carrasquilla, Colombia’s finance minister, will step down on March 7 according to a statement by the finance ministry. Oscar Iván Zuluaga, currently presidential advisor to President Alvaro Uribe, will take over as the new finance minister on March 8 or 9. Alberto Carrasquilla, who became finance minister in 2003, tendered his resignation last month for personal reasons.
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Cemargos Sells 10-Year Bonds To Raise $68 million
Colombia’s largest cement-maker, Cementos Argos, owned by local conglomerate GEA, sold $67.6 million worth (150 billion pesos) of local bonds on Friday at a yield of inflation plus 5.25 percentage points. Proceeds raised from the sale of the 10-year peso-denominated bonds will be used to replace shorter-term local currency debt, as well as for working capital. The offering is part of a debt program approved in September 2005 to sell up to 600 billion pesos of bonds. The company sold bonds worth 450 billion pesos last November.
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Colombia Central Bank Raises Benchmark Rate To 8%
Colombia’s Central Bank raised the benchmark lending rate by a quarter of a percentage point to 8.0% on Friday, to slow accelerating growth and stave off inflationary pressures. Last month the Bank also lifted rates a quarter of a percentage point from 7.50% to 7.75%. Earlier this month, the finance ministry said that Colombia’s economy grew by around 7% last year, and perhaps as much as 8% in the last quarter, driven by domestic demand and private investment. The Central Bank is targeting inflation of between 3.5% and 4.5% this year.
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Peru Retires 60% Bonds In Exchange
Peru bought back Friday 60% of $3.6 billion in outstanding 2012 and Brady bonds it was targeting in an exchange. Just over $1 billion of aggregate principal of the outstanding $1.4 billion of 2012s were swapped for the following: $833 million in new 8.375% 2016 bonds, $85 million of 8.75% 2033 bonds and $71 million cash. Of the $2.2 billion in Bradies, $691 million in PDIs and $684 million in FLIRBs were exchanged for new 2037 notes and a small portion of cash. Also in the Brady category, $82 million in discounts and $11 million in Pars were exchanged for 2037 notes and more significant portions of cash. Citi and Deutsche were dealer managers.
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PDVSA Wraps Up $3.5 Billion Financing
Venezuela’s state-owned oil company has wrapped up a $3.5 billion loan led by Japan Bank for International Cooperation, Mizuho and Bank of Tokyo Mitsubishi. The deal involves two separate credit facilities worth $1.8 billion and $1.7 billion. Proceeds will fund advance oil purchases by Japan’s Marubeni and Mitsui.
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Peru Sells $88 Million In Domestic Bonds
The Republic of Peru tapped the domestic market for 280.5 million Soles ($87.9 million), through a reopening of its 8.2% 2026, which had $445 million outstanding. Proceeds were used to fund the cash payment of the exchange for dollar-denominated debt.
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Digicel Prices Jumbo Junk Bond
Digicel, a Jamaica-based wireless provider, priced a $1.4 billion bond tighter than the initial price talk of 9.00%-9.25%. The $1 billion in cash pay bonds, priced at par with an 8.75% coupon, while $400 million in cash or PIK notes, also priced at par, with a 9.125% coupon. Predominantly European and US investors specialized in high-yield and emerging markets placed more than $7 billion in orders for the Caa2/CCC+ (Moody’s/Fitch) issue. A banker close to the deal attributed strong interest to the popularity with investors of Digicel’s owner Denis O’Brien, an Irish entrepreneur. Citi led the deal with JPMorgan as co-lead.