Merrill Lynch says it expects Banxico (Mexico’s central bank) to keep the benchmark interest rate unchanged at 7% at this Friday’s monetary policy meeting and also foresees the Bank keeping it on hold until the end of the year. Recent inflation data “reinforce Banxico’s and (by now) the market’s belief that the up-tick in inflation is indeed temporary and that, come December, inflation will close the year under the 4.00% target ceiling”, added Merrill Lynch. The Bank said it believes a slowdown in growth from now on will allow Banxico to ease up in the first quarter of next year and end the year at 6.25%, although it warned that “the pace of US growth will remain a key issue.”
Category: Regions
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Moody’s Rates Mexico DF Bonds
Moody’s Investors Service has assigned national scale ratings of Aaa.mx and global scale (local currency) ratings of Baa1 to the upcoming bonds to be issued by Mexico’s Federal District, reflecting the credit quality of the federal government, the ultimate obligor of the debt. The bonds will total up to $1.4 billion pesos ($128 million) and will be issued via JP Morgan acting as fiduciary. Proceeds of the new debt will be used to fund infrastructure projects included in the 2006 budget and in accordance with the guidelines included in the federal government’s 2006 Revenue Law.
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Comcel To Sell $66 Million Commercial Paper
Colombian cell phone operator Comunicación Celular (Comcel), part of Mexican operator América Móvil, is to issue $66 million worth (150 billion Colombian pesos) of commercial paper today, Tuesday. Comcel offered to pay a maximum yield on the 90-day paper of 7.9%. The bond sale will be led by BBVA. The offering is part of a larger debt issuance program totaling $438 million (1 trillion Colombian pesos). Last month Comcel sold $42 million worth of 45-day paper in the local market.
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Michiquillay Auction Postponed
Peru has decided to delay the closing of the tender process for its copper mine Michiquillay from mid-December until February 28 to give more time to prospective bidders to study documentation. The government, via its private investment promotion agency ProInversión, is looking for investment of between $300 million and $700 million. Michiquillay, located in Cajamarca, close to South America’s largest gold mine Yanacocha, has reserves of copper, gold and silver estimated at 544 million metric tonnes. Those who have shown an interest in bidding include Southern Copper Corp and Compañía de Minas Antamina.
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S&P Raises Peru Rating
Ratings agency Standard & Poor’s has raised its long-term foreign currency sovereign credit rating on Peru to BB+ from BB and its long-term local currency sovereign credit rating to BBB- from BB+. The outlook on the ratings was revised to stable from positive. S&P said the ratings action, which brings Peru’s long-term local currency rating into investment grade, reflected the country’s: “Greater signs of political stability, combined with a strong economic performance”. The ratings agency noted that “The combination of a favorable international environment and sound implementation of economic policies has led to a substantial reduction in the government’s main historic credit risk, in particular its fiscal and external vulnerabilities,” and pointed to the 20-year, fixed-rate sol-denominated bonds issued by the sovereign as a reflection of the stable inflationary environment in Peru.
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Colombia Keeps Benchmark At 7.25%
Colombia’s Central Bank has decided to hold the country’s benchmark overnight lending rate at 7.25%, the first move to hold it in the past four months. Unexpected deflation last month has allowed the Bank to take a break from the rate hikes, say analysts. In October, consumer prices fell by 0.14%, taking cumulative inflation to 4.0%, the lowest since 1955, and annual inflation to 4.2%.
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Venezuela May Buy Curaçao Refinery
Venezuela’s state-owned oil company PDVSA has reportedly offered $1.5 billion for a 49% stake in an oil refinery in the Caribbean island of Curaçao, part of the Netherlands Antilles. PDVSA currently leases the Isla refinery from the government and has a contract to do so until 2019. The refinery processes 320,000 barrels of oil per day but large investments are needed to ensure the facility remains profitable and to keep it up to date with environmental requirements.
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IMSA Share Buyback Imminent
Grupo IMSA, Mexico’s largest steelmaker, says it has received approval from the securities commission for its plan to buy back the remaining 12% of its stock via a public offering on the Mexican Stock Exchange, clearing the way for the company to be delisted. In October, the Canales Clariond family increased its shareholding in the Group by buying up the 43% stake held by other family members for just over $1 billion. On Wednesday last, Fitch Ratings downgraded the Mexican steelmaker to AA+ to AA-, citing the post-merger weakness in IMSA’s financial indicators. IMSA has operations in Mexico, Central America and the United States.
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Argos Syndicating Refinance
Colombia’s Cementos Argos is out with a $480 million five-year loan through Citigroup and BNP. The senior unsecured term loan facility is heard priced at 137.5bp out of the box on a leverage grid. Some $310 million is earmarked for loan refinancing and the balance to redeem bonds.
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Mexico Growth Weakens
Economic growth in Mexico weakened in the third quarter, expanding by 4.6%, year-on-year, against growth of 5.5% and 4.7% in the first and second quarters of the year. A fall-off in international oil prices and an easing of US demand for Mexico’s exports have seen a gradual cooling off in economic growth. The figures are in line with economists’ expectations, who forecast growth falling further to 3.5% next year from around 4.5% for this year.