Peru is leading the region with impressive low-inflation growth, but the pace of expansion will slow this year and next, according to Banco del Credito. “For the next two years, it’s feasible that the economy will grow at rates above 6%, owing to accelerated growth in private investment and favorable external conditions,” says the Peruvian bank. It forecasts a 6.6% rise this year. Peru’s 8.0% GDP growth in 2006 was second in the region to Argentina’s 8.6%. However, the latter also saw 9.8% inflation. Peru saw growth of 9.2% and 7.4% respectively in the first two months of the year, and is set to record 7.5%-8.0% growth in the first quarter. Inflation over the last 12 months was 0.2%, one of the lowest in LatAm, according to BCP, though there are concerns that a 12% leap in domestic demand in Q1 could pressure prices higher. Bear Stearns notes a 10.2% increase in reserves to more than $19bn, following a 22.5% jump in 2006 reserves to $17.3bn. “Peru’s strong economic, monetary, fiscal and external conditions afford a compelling fundamental justification for its bonds to perform well and for the country to be viewed as a good candidate for ratings upgrades,” says Bear.
Category: Regions
Petrotrin To Price Next Week
Trinidad and Tobago’s Petrotrin, which is out on the road with a $750m amortizer due 2022, is expected to price next week following an extensive roadshow via Citi. Price talk is not yet out, but bankers say the only comp is NGC, Trinidad’s natural gas company, which issued a bond in early 2006 through Citi/Lehman. On Tuesday, the 2036 NGC bond, rated A3/BBB+ was trading at 99.25 to yield 6.10%
Merrill Raises Venezuela, Cuts Colombia
Merrill Lynch has raised Venezuela to overweight in its external EM debt portfolio while scaling back Colombia to underweight. In Vene, the shop expresses a bullish view through the 2018 and 2020, but avoids the 2025. Merrill is essentially buying the dip after fears of a PDVSA glut were unfounded. It also sees upside in the inclusion of PDVSA in major indices used by clients, including the EMBIG, and the fact that some Venezuelans will remain invested. Vene continues to be underpinned by oil, which reinforces ability to pay. Part of this reallocation is funded by a switch out of Colombia 2037s, based on an expectation of possible profit taking at the long end. A trigger would either come from deteriorating external conditions or the return to headlines of the Territorial Transfers reform, says Merrill.
Petrotrin to Sell 15-year Bonds
Trinidad & Tobago’s state owned oil company Petrotrin is on the road with a $750m 15-year amortizer. Citi has sole books. Moody’s rated the bond Baa2.
Pemex Oil Output in Decline
The latest data from Pemex show output from the Mexican oil giant still in decline versus last year. The March 2007 figure of 3.18m barrels per day (bpd) is 5% lower than the 3.35m bpd seen in March 2006. Oil production was down in each of the first three months and some investors worry that it is in a long term decline that could seriously dent sovereign credit quality. The good news is that exports are rising slightly. But at 1.78m bpd in March, they are still more than 10% short of what was being shipped out a year earlier. In a speech last week, director general Jesús Reyes Heroles said, “The company’s situation is critical and deserves immediate attention.”
Compartamos Prices IPO at Top of Range
The first equity issue from a LatAm microfinance institution, Mexico’s Banco Compartamos, priced at the top of the range and the greenshoe was exercised. The bank, which makes micro loans to individuals, sold 5.13bn pesos ($467m) in series O shares on the Mexican Bolsa. International investors took $332.3m in the 144a Reg S tranche, while Mexican retail took $73m. The offering, which accounts for 30% of the bank’s outstanding shares, priced at the top of the range, at 40 pesos a share and included a 15% over-allotment option that was exercised. Compartamos raised the price range to 36 to 40 pesos a share from 28 to 35 pesos after meetings with investors. US investors accounted for around 45%, Europeans near 30%, 20% Mexico and 5% Brazilians. In the first day of trading, Compartamos shares appreciated by 25%. The deal enables shareholders, such as the IFC, which was the third-largest shareholder in the bank, to partially monetize their stakes.
GAP Names New Chief Executive
Jorge Sales Martinez has been named the new chief executive of Mexican airport operator Grupo Aeroportuario del Pacifico (GAP). Sales Martinez, a Spanish national, will replace Carlos Del Rio from 1 July. The new chief executive is currently head of Jamaica’s MBJ Airports Limited.
Suraminv Increases Share in Inversura
Colombian holding company Suraminv is increasing its share in insurance firm Inversura, buying a 9.8% stake from the International Finance Corporation (IFC), the private sector arm of the World Bank. Suraminv will pay $100 million to IFC and will see its share in Inversura rise to 80.5%.
Economy Minister Vallarino Is Panama’s New Comptroller General
Carlos Vallarino, currently economy minister of Panama, has been elected to the post of Comptroller General for the country. He replaces Dani Kuzniecky who left in mid-April to take charge of the Panama Canal Authority (CAP) instead of Ricaurte Vásquez. Reports in local media have named Héctor Alexander, currently deputy minister of finance as the likely replacement for Vallarino.
Telmex Sells $860m Equivalent In Local Bonds
Mexican telco Telmex has sold 9.5bn pesos ($863m) of local bonds in two tranches, carrying two maturities. It sold 5bn pesos of 30-year bonds to yield a fixed rate of 8.36% and 4.5bn pesos of 5-year paper at 0.1 percentage points below the TIIE interbank rate. The issuances were part of a 10bn peso debt program. Proceeds from the sales will fund the upgrade of infrastructure as well as refinancing debt.