Mexico is planning to issue another catastrophe bond (CAT) early next year, this time to protect against hurricane damage. In May this year, it sold $160 million worth of CAT bonds as part of a $450 million insurance package to protect itself against the future cost of damage in the event of a major quake. This was the first time Mexico had issued such paper and the first time a developing nation had tapped the financial markets in this way. The new CAT bonds will cover the hurricane-prone regions on the Yucután Penisula and those along the Pacific coast.
Category: Regions
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Central American Securities Exchanges Join Forces
The Central American securities exchanges of Panama, Costa Rica and El Salvador have signed an agreement to develop a joint electronic exchange. The new exchange, which has yet to be named, is due to open in about 12 months and will quote shares and corporate debt securities. The three exchanges, which together accounted for $677 million share turnover and $42.8 billion of debt securities transactions last year, are considered the most developed in the region outside Mexico. The aim of the exchanges is to join forces and form a regional market along the lines of the NOREX, Scandinavian market.
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Promigas Stake To Go To Prisma
One of the largest shareholders of Colombian natural gas distribution company Promigas is to sell its 33% holding in the company for around $350 million in November. EMHC of the US has said it will sell the shareholding in Promigas to Prisma Energy Internacional, a subsidiary of Enron, via the Colombian Stock Exchange. Promigas is the largest private natural gas transmission company in the country and transports around 65% of natural gas in Colombia.
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Panama To Build Thermal Power Plant
Panama is to invest $300 million to build a new thermal energy plant with a 250MW capacity, representing 20% of the country’s daily energy needs. The government set up Empresa de Generación Eléctrica SA (Egesa), which will run the plant, to participate in the upcoming energy tender to supply 200MW daily, from 2007 until 2020, being offered by power distributor Unión Fenosa. Carlos Carache has been appointed managing director of Egesa.
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Korean Steelmaker Heads To Mexico
South Korean steelmaker Pohang Iron and Steel Co (POSCO), the fourth-largest in the world, is to build a new plant in northern Mexico for $250 million, to supply the booming local automotive industry. The plant, to be built in Altamira, in the state of Tamaulipas, will produce galvanized steel sheet and should be ready by 2009.
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Mexico Auto Production Up 19.5%
Mexico’s car production in August was up 19.5%, compared with the same month a year ago. The rise was driven, yet again, by export demand for automotives, which increased by 38% in the month. Even domestic sales, which had been expected to drop, held their ground and rose by 0.3%. Exports of automotives have risen as foreign manufacturers expand their operations in the country to take advantage of cheaper manufacturing costs. The auto industry is an important component of Mexico’s industrial production, accounting for around 10% of its total output.
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Televisa May Bid Again For Univision
Mexican broadcaster Televisa is said to be considering heading up a new bid for US Spanish-language broadcaster Univision. Grupo Televisa lost out in bidding to a group of investors that included Texas Pacific Group and Thomas H Lee Partners. The latter bid $12.3 billion for Univision following the $12 billion bid by the Mexican broadcaster. Televisa will likely lead a group of US investment funds in the bidding as it is forbidden, by US law, to hold more than 25% of the capital of the company.
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Peru Details Debt Plan
Peru is planning to save around $1.5 billion in debt servicing costs on debt owed to the Paris Club group of lenders by extending out debt due in 2010 by another three to five years. The country owes around $5.75 billion to the Paris Club in total. Last year, Peru paid down $1.5 billion of its debt to the creditors. The government also says it aims to reduce the ratio of its foreign public debt from 78% of the total to 69%, converting it into domestic debt by the end of next year. The move will help protect Peru from external shocks say economists. Next week the government will make its eighth local-currency bond issue, this time worth $70.7 million. It last sold local-currency sovereign bonds in August, worth $121 million.
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Cemex To Build Plant In UK
Mexico’s largest cement producer, Cemex, is to invest $49 million to build a new grinding and blending facility in the UK. It is due to be online by 2008. The plant, to be built near London at Tilbury, will have a capacity of 1.2 million tonnes a year. The company said the new plant will be “well placed to help meet demand for the cement required for new developments in the region and the sustainable construction challenges of the London 2012 Olympic Games.” Earlier this year, the company announced a $500 million global expansion program that will also see increased operating capacity in US, France and Latvia.
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Mexico Inflation Quickens In August
Mexico’s rate of inflation quickened in August, rising 0.51% to post cumulative inflation of 3.47% for the eight months through August, the highest level in six months. The monthly rise compares with an increase of 0.12% in August last year. The price rises were driven by increases in the cost of electric power and certain agricultural goods, according to the Central Bank. The Bank had forecast inflation of 3% for the year; most analysts are now predicting a rate closer to 3.4%.