Carstens Answers Calderón Call Agustin Carstens Mexican finance ministry veteran Agustín Carstens left his post as deputy managing director at the International Monetary Fund to act as economic coordinator for […]
Category: Regions
Posted inDaily Brief
Latin America Top Region For IFC Financing
The International Finance Corporation (IFC), the private sector arm of the World Bank Group, announced that Latin America and the Caribbean region represented the largest recipient of IFC financing during fiscal 2006, receiving $2.6 billion in total. The IFC has invested $31 billion in the region in the past 50 years, according to the organization. In fiscal year 2006, the Corporation committed $1.75 billion to 69 private sector projects, as well as $888 million from commercial banks through syndicated loans, for a total of $2.6 billion. This financing was broadly distributed throughout the region, with the largest support for companies in Brazil, Mexico, Argentina, Colombia, the Caribbean, Central America, and Peru, across such sectors as infrastructure, housing, microfinance, agribusiness, and oil and gas.
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SQM Sells Olmeca
Chilean specialty fertilizer company Sociedad Quimica y Minera de Chile (SQM), has sold its total stake in Mexican firm Fertilizantes Olmeca to Norwegian firm Yara International for $4.9 million. SQM originally bought Olmeca in 1997 as a key distribution channel in Mexico but says that less than 25% of SQM specialty plant nutrients sold in that country are now distributed through the company. SQM retains a presence in Mexico via its subsidiary SQM Comercial de México.
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Panama To Unveil Canal Toll Increases
Panama is due to present a plan outlining its proposed toll increases. The higher fees will help to fund the project to widen the Canal, a project that was recently approved by the public in a national referendum. Although Panama has said that it will double the current toll over the next 20 years, it has yet to provide details of the increases and a schedule of when they will be introduced.
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Guatemala Records Deflation In September
Guatemala registered its second month of deflation this year, with a fall in prices by 0.38% in September. The decline in the rate of inflation was driven mainly by the drop in international oil prices, according to the country’s national statistics institute, INE. September’s inflation takes the rate accumulated for the year to 3.87% and year on year inflation down to 5.7% from 7% in August.
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Femsa To Up Stake In KOF
Mexican brewer and bottler Femsa is planning to increase its stake in Coca-Cola Femsa (KOF) in exchange for $427.4 million, according to the company. Femsa will buy an additional 8% shareholding from Coca-Cola, taking its stake to 53.7%. It hopes to close the acquisition by November 3.
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Banxico Keeps Corto Unchanged
Mexico’s central bank, Banco de Mexico (Banxico), left the “corto” unchanged at 79 million pesos on Friday, keeping the benchmark overnight lending rate unchanged at 7% for a sixth month in a row. Mexico’s monthly inflation quickened in September, rising 1.01%, following an increase of 0.51% in August. The rise took inflation for the year through September to 4.09% from 3.47% through August. The Bank is forecasting inflation in October to November to be around 4%.
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Colombia Benchmark Rate Up To 7.25%
Colombia’s Central Bank has raised the benchmark overnight lending rate yet again, pushing it up by 25 basis points to 7.25%. This is the highest level in three years and follows the surprise move last month when the Bank raised the rate from 6.75% to 7%. So far this year, the Bank has raised the benchmark rate a total of 125 basis points. The continued growth of the economy in the third quarter and a desire to keep a lid on inflationary pressures prompted the Bank to raise the rate once more.
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Cemex Lines Up Financing
Mexican cement leader Cemex has been busy lining up financing for its audacious, all-cash $12.8 billion hostile bid for Australian building materials group Rinker. The Mexican company has secured commitments from BBVA, Citigroup, JP Morgan and Royal Bank of Scotland Group. It is thought much of the financing will be done through Cemex’s Spanish subsidiary, Cemex España. Citigroup Global Markets and JP Morgan Chase will act as advisors to Cemex. Rinker has appointed UBS to advise. On Friday Cemex, the world’s third-largest cement producer, offered to acquire all of Rinker’s outstanding shares at $13 per share, 27% over the closing price on the Australian Stock Exchange. An initial statement from Rinker’s chairman, John Morschel, Monday, commented that Cemex’s offer was “opportunistic and materially undervalues the company”. The takeover, if approved, will be the largest by a Mexican company as well as the largest ever in the building materials sector. It would create the world’s largest building materials company with revenues of $23.2 billion and more than 67,000 employees in over 50 countries, according to Cemex. The acquisition would increase the Mexican producer’s presence in the US market as well as giving it an entrance into the Australian market. Meantime, Fitch ratings has placed Cemex and Rinker on rating watch negative in expectation of the “significant leverage and deterioration of credit fundamentals of both companies” resulting from the debt financing.
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EAAB Taps The Market
EAAB, the water and sewage utility for the Colombian capital Bogotá, successfully placed $107 million worth of debt in the local market in the face of almost threefold demand. The issuance of the debt securities (TAB) has extended out the company’s debt profile from four to nine years; the money raised has been used to pay down more expensive and shorter-term debt. This is the first time the company has issued local debt and signals that the markets in Colombia are becoming more stable, according to analysts. Corficolombiana led the issue; Luz Piedad Rugeles acted as legal advisor and the other placing agents were Alianza Valores, Correval and Suvalor.