Ecuador has helped to lower its debt servicing costs by an estimated $20 million a year by successfully retiring part of its most expensive debt. Ecuador, Monday, bought back $740 million of its 12% global 2012 issue, leaving only $510 million of the bonds outstanding in the market. A $400 million loan from the Latin American Reserve Fund and another $340 million from the December sale of 10-year bonds were used to finance the operation.
Category: Regions
Posted inDaily Brief
Petroecuador Takes Over Oxy Oil Fields
Ecuador’s state-owned oil company, Petroecuador, has taken control of the local oil fields operated by Occidental Petroleum (Oxy) of the US, bringing to an end another chapter in the long-running dispute between the state and the company. Late Monday, the Ecuadorian government cancelled the existing production agreement with Oxy, claiming that it sold part of the country’s oil stock illegally to Canadian company EnCana in 2000. Analysts estimate that Oxy’s Ecuador operations represent around 7% of the company’s oil and gas output and 3% of its reserves. Oxy is the fourth-largest oil company in the US.
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Panama Inflation Trends Upwards
Panama’s rate of inflation is trending upwards, according to the latest government figures. Consumer prices rose 1.1% in April, taking annual inflation through April to 1.4%. Year-on-year, inflation rose 2.9% in April. Last year, prices increased 2.9% over the year, above levels usually seen in the country.
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Spanish Eye Banco De Guayaquil
Spanish savings bank Caja de Ahorros de Mediterráneo (CAM), based in Alicante, is reported to be considering investing in a stake of privately owned Ecuadorian bank, Banco de Guayaquil. If it decides to go ahead, CAM will join several other Spanish institutions already operating in Ecuador, including Santander, BBVA, and Banco Sabadell. Banco de Guayaquil is among the most solid of Ecuador’s banks and among the top four in terms of assets.
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Peru Expands 10.65% In March
Peru’s economy expanded at the vertiginous rate of 10.65% in March, compared with the same period a year ago, according to the national institute of statistics and information (INEI). This takes year-on-year first-quarter growth to 7.15%. Expansion was driven by an increase of just over 38% in the fishing sector and almost 10% in manufacturing. Annual growth is expected to reach 5% this year.
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Ara Looks Forward To Increased Stock Liquidity
Ara, one of Mexico’s largest home builders, said that an imminent secondary offer of its stock by the company’s largest shareholders will increase liquidity. The company said that Germán and Luis Felipe Ahumada, who between them own 51.3% of Ara’s capital, were planning to sell 42 million shares, representing 14.7% of the company’s stock.
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Bolivia Calls On Pension Funds To Hand Over Oil Shares
Bolivia has called on two foreign-run private pension funds – belonging to Spain’s BBVA and Swiss Zurich Financial Services – to hand over the shares belonging to three of the country’s nationalized oil companies which they administer on behalf of the Bolivian people. A deadline of Thursday has been set by the government for the two funds – Previsión Bolivia, run by BBVA and Futuro de Bolivia, run by Zurich to transfer the assets to state-owned oil company YPFB. The combined worth of the shares under administration is around $1.6 billion, according to the government.
Posted inDaily Brief
Buyback Deadline For Ecuador
Ecuador was due to buy back $740 million worth of its $1.25 billion 2012 global bonds, yesterday, Monday. A $400 million loan from the Latin American Reserve Fund and another $340 million from the December sale of 10-year bonds were to be used to finance the operation. Finance Minister Diego Borja expects the buyback of its highest-yielding 12% to save $20 million a year in debt payments. The country is thought likely to tap the international bond market following the buyback to raise further capital ahead of the November call date to retire the rest of the 2012 bonds. It has been authorized to issue up to $900 million.
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Mexico Sells $160 Million CATs
Mexico, a country plagued by earthquakes, has sold $160 million of catastrophe (CAT) bonds to protect itself against the future cost of damage in the event of a major quake. This is the first time Mexico has issued such paper and is the first time a developing nation has tapped the financial markets in this way. The bonds, which have three-year maturities, pay 2.35 percentage points over Libor. They were offered to Mexico by Swiss Re as an alternative to reinsurance. Swiss Re also managed the sale of the bonds, alongside Deutsche Bank. CAT bonds are considered attractive by investors as they have almost zero correlation to other financial market risk.
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Televisa Still Yearns For Univision
Televisa, Mexico’s largest media group, is reportedly still hoping to take control of Univision, the US broadcaster which commands 80% of the Spanish-speaking audience in the US. Televisa, which currently holds an 11.4% stake in the US company, has allegedly been meeting with four US buyout firms and one of Univision’s directors to discuss forming a bidding consortium. Los Angeles-based Univision, which has a market value of $10.9 billion, announced in February that it was for sale. UBS is managing the sale of the company.