Colombia may issue dollar-denominated bonds later this year, should market conditions improve, as part of its 2007 financing plans. The bonds are likely to have 10-year maturities or more. The spread on Colombian government US dollar debt is currently around 244 basis points above US treasuries, as measured by JP Morgan’s emerging market bond index.
Category: Regions
Posted inDaily Brief
Ecuador Presidential Campaigning Begins
Campaigning in Ecuador’s presidential elections, slated for October 15, has begun amongst uncertainty and continuing political upheaval. Left-of-center lawyer León Roldós is thought to be the early frontrunner facing right-of-center Cinthya Viteri and also, perhaps, former president Lucio Gutiérrez. The latter has registered his candidacy to run despite a ruling last month by Ecuador’s electoral court that Gutiérrez would not be able to hold public office for at least two years because of campaign irregularities in 2002. If no candidate wins more than 50% of the vote in October, a second round is scheduled for November 26. Ecuador has had seven presidents in the past 10 years, with the most recent change of leader in April 2005 when former president Lucio Gutiérrez was ousted from government by Congress and replaced by an interim leader, the incumbent Alfredo Palacio.
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Banco Agromercantil In Talks To Acquire Banco Del Café
Meanwhile, in Guatemala, the country’s fifth-largest bank – Banco Agromercantil – is in talks to buy Banco del Café, the next largest bank. The deal would be financed via a capital increase and with loans from Cabei, Citibank, and Wachovia. Banco Agromercantil was formed six years ago from the merger of two of the country’s oldest banking groups – Banco del Agro and Banco Agrícola Mercantil. Although one of the country’s smaller banks, with less than 10% market share, it is considered one of the most profitable and has been consistently voted best bank in Guatemala by financial publications. It is now in what it calls its “third phase”, which is one of expansion.
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Colombia Starts Final Bank Privatization
The Colombian government has started the privatization of its last remaining financial asset, Granbanco-Bancafé. The bank, the country’s seventh-largest in terms of assets, is expected to bring to the country’s coffers around $450 million and will give the successful buyer around 6% of the country’s banking assets. In this initial phase of privatization, and according to national law, the assets of the bank will be offered to the country’s pension funds, unions, cooperatives and other sectors of the so-called “solidarity” public sector. After this initial two-month phase, the bank will be offered up to other buyers. Of the local bidders, Grupo Colpatria, Grupo Bolívar, the mayor shareholder of Davivienda, and Bancolombia are all expected to participate in the sale. Foreign bidders may well include Spain’s Grupo Santander, Citibank and HSBC.
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Panama Approves Canal Project; Referendum To Decide
Panama’s upper house, the Legislative Assembly has approved the project to expand the country’s historic canal and vital waterway, the first expansion since the Panama Canal was opened in 1914. The $5.25 billion project – of which around half will come from foreign financing – will now be put forward for public approval in a referendum. The plans to expand the Canal, to accommodate ships with greater capacity – so-called “post-Panamax” vessels – are not without their critics, who say the country will be overly indebted for work which is not essential.
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Ecuador Minister Resigns, Again
Meanwhile, in Ecuador, foreign trade minister, Roberto Illingworth has resigned, again, and only seven days after being reappointed to the post. His surprise resignation came as a result of a protest of his appointment by the Guayaquil Chamber of Commerce. Illingworth, who worked at the Chamber for 20 years, is suing it in a labor dispute and has refused to withdraw his suit. He therefore, chose to resign from the government “to avoid making problems for the president”.
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Ecopetrol Delays Refinery Sell-Off
Colombia has delayed the privatization of state-run Ecopetrol’s Cartagena refinery, slated for mid-July, after some of the pre-qualified bidders requested more time. Ecopetrol, which has so far maintained a monopoly on oil refining in the country, is selling off control of the Cartagena refinery, the second-largest in Colombia, because private money is required to finance the much-needed $800 million expansion project. Pre-qualified bidders include: Brazil’s Petrobras, BP of the UK, Japan’s Marubeni Corp and Switzerland’s Glencore International. Ecopetrol will now pick a winner in August.
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IADB Approves $200 Million For Colombia
The Inter-American Development Bank (IADB) has approved a $200 million loan for Colombia to help improve its competitiveness. The 20-year loan is to be spent improving the business environment and help break down legal, regulatory and institutional barriers to foreign trade.
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Bolivia: Best Economic Performance Since 1998
Bolivia’s GDP expanded 4.3% in the first quarter of 2006, compared with the 3.9% expansion seen in the same period last year and the best rate of first-quarter growth seen since 1998. Growth was driven by the mining sector, which expanded by 18% and hydrocarbons, which were up 12%. Inflation for the first half of the year stood at 2.05%, compared with 3.45% for the same period last year. The new government of Evo Morales took office at the end of January and has moved to increase revenues from abroad by nationalizing the hydrocarbons industry and renegotiating the price of exported energy.
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IFC Extends $40 Million Credit To Volaris
The International Finance Corporation (IFC), the private-sector arm of the World Bank, is to extend a line of credit of up to $40 million to Mexican low-cost air carrier Volaris. Most of the loan will be used to pay for extra aircraft to build up the airline’s fleet. The IFC has extended credit facilities to other air carriers in the region such as TACA, TAM, LanChile and Copa. Volaris, which began operating in March this year, is partly owned by Mexican broadcaster Televisa and local billionaire businessman Carlos Slim, among others.