Energy provider Globeleq of the UK began construction of its $135 million Kallpa electricity plant in Chilca, Peru. The 504 MW plant, being built 63 kilometers south of the capital Lima, will use natural gas from the country’s Camisea reserves. Financing for the project has come from Citibank Peru and Banco de Crédito del Perú.
Category: Regions
Posted inDaily Brief
Credit Suisse Switches Colombia Exposure
Credit Suisse has said it is switching its Colombia exposure as the country’s sovereign curve “looks somewhat steep” versus comparable sovereigns. In a research note, the Bank commented that the long end of the Colombia curve has been lagging the 10-year sector in recent weeks and explained that the underperformance was partly due to the recent retap of the 2037 global issue, which had widened to the 2014 bonds by almost 20bps during the past month. The Bank said it plans to cover its short position in Colombian 2033 sovereign bonds by selling off an equal market weight of 2014 bonds, which appeared expensive. The switch will move the Bank’s portfolio to “a near neutral weighting in Colombia in DV01 terms”.
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Ecogas Fuels Interest
Seven companies have registered their interest in bidding for Colombian state-owned Ecogas, due to be privatized at the beginning of December. The government, which hopes to raise up to $1 billion from the sale, was due to close the tender process on November 24 but has extended the deadline to December 5 because of investor interest. Those who have paid to access the data room set up for the privatization of the natural gas transport company include Colombian state-controlled energy provider ISA, Colombian natural gas transporter Promigas, Bogotá power company EEB, Telmex, the IFC, Enbridge of Canada, and Prisma of the US. The government will announce a short-list on November 20.
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Colombian Brokerage Sells To Stanford Group
Texas-based financial group Stanford Group Company has bought Colombian brokerage firm Bolsa y Banca, for an undisclosed sum, after several months of talks. The brokerage will receive a fresh injection of capital in the next few weeks to strengthen it and help it expand in the local market. Stanford Group also has a presence in Panama, Ecuador, Venezuela and Peru.
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Mexican Electricity Operator Sells 30-Year Bonds
Mexico’s state-owned electricity company – Comisión Federal de Electricidad (CFE) – has sold $137.5 million worth of 30-year bonds. The money raised will be used to finance the completion of its 750MW hydroelectric plant El Cajón. The bond matures October 3, 2036 and carries annual interest of 8.58%. Acciones y Valores Banamex placed the bonds.
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Mexico October Inflation 0.44%
Mexico’s monthly inflation in October was better than expected, with prices rising only 0.44% compared with 1.01% in September. However, inflation for the 12 months through October picked up pace to 4.29%, from 4.09% in the 12 months through September. The Central Bank has said that the recent spike in inflation is temporary, driven by the seasonal price of fresh produce. Meanwhile, core inflation for the month was 0.27%, taking annual inflation to 3.44% from 3.45% in September.
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Montealegre Concedes Defeat In Nicaragua
Nicaraguan conservative presidential candidate Eduardo Montealegre has conceded defeat in Sunday’s elections, confirming the win by Sandinista leader Daniel Ortega. With almost all the votes now counted, Ortega won 38% of ballots cast against 29% for Montealegre. Meanwhile, Ortega has said he is in favor of constitutional reforms that will see presidential powers reduced. “There will be no dramatic or radical changes to the economic foundations that have been laid over these years”, the former Marxist guerrilla said on a visit with outgoing president Enrique Bolaños, according to Nicaraguan daily La Prensa.
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Mexico Remains Alert
Security in Mexico City remained tight after two further devices exploded, this time in the seaside resort of Ixtapa, where outgoing president Vicente Fox and president-elect Felipe Calderón are attending a conference. The new explosions on Monday evening came hours after five groups claimed responsibility for the explosions early Monday morning in Mexico City. The groups, which say they are coordinating their actions in support of the protests in Oaxaca against state governor Ulises Ruiz, warned that they will target Mexico’s “40 principal national and transnational companies,” until governor Ruiz resigns and their demands are met.
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Moody’s Improves Peru Outlook
Ratings agency Moody’s Investors Service has improved is outlook on Peru’s Ba3 foreign-currency government bonds to positive from stable. The action was taken to reflect significant reductions in Peru’s external vulnerabilities, said the Agency. Moody’s highlighted the declining trend in the country’s external debt ratios and the fiscal restraint being applied by President Alan García’s new administration. However, the Agency also noted that although the government has taken steps to increase local-currency funding in the domestic market, “a latent credit vulnerability remains given the presence of a relatively high share of foreign currency denominated debt”.
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Panama Gets UN Security Council Seat
Panama was finally voted in to the last remaining non-permanent, Security Council seat at the United Nations, Tuesday, ending weeks of deadlock between Guatemala and Venezuela. Panama, which won 42 votes more than the 120 needed, will take up the seat on January 1, replacing current occupant Argentina. The battle between Guatemala and Venezuela for the only Latin American seat available was billed by many as a battle against the will of the US, which had openly backed Guatemala’s bid. Panama was finally accepted as a compromise candidate. The 10 non-permanent seats on the UN Security Council have a two-year tenure (two seats are allocated for Latin America and the Caribbean region). Only five of the 10 are up for renewal at the end of this year. The permanent members of the Council, who enjoy the power of veto, include the US, Russia, the UK, France and China.