Mexico sold 750 million euros ($920 million) of 10-year bonds, seeking to raise funds to pay debt due in 2006. President Vicente Fox reiterated last week he would raise enough money this year to cover $3 billion of foreign maturities due in 2006, to avoid an increase in borrowing costs stemming from concern the next president, who will be elected next year, may boost spending. Mexico last tapped the debt market on May 17 with a 250 million 7-year Swiss franc note. Barclays and UBS managed yesterday’s sale. Moody’s rates Mexico’s debt Baa, three levels above junk.
Category: Regions
Posted inDaily Brief
Embraer Makes Sale
Flybe, the low-cost UK airline formerly known as British European Airways, placed a firm order with Empresa Brasileira de Aeronautica (Embraer) to buy 14 Embraer 195 jets for $470 million, with the option of buying 12 more. The first of the planes will be delivered in the second half of 2006. The Embraer 195, with 118 seats, is part of a new line of jets being developed by the company to expand from the 50-seat regional jet market its shares with Canadian competitor Bombardier. Flybe is the second low-cost carrier to buy Embraer’s new jets. JetBlue, a US discount carrier, ordered 100 Embraer aircraft for $3 billion in June 2003.
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Femsa Sells Shares
Fomento Economico Mexicano (Femsa), the world’s second-largest Coca-Cola bottler, raised about $700 million after selling 130 million shares for $5.32 each. The company will use the money to pay off debt it took on last year when it bought back a 30 percent stake in its beer unit for $1.25 billion.
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Chiquita, Dole Offices Raided
Chiquita, the world’s biggest banana producer, said it provided evidence of industry price fixing to European Union investigators, who raided the offices of fruit suppliers including competitor Dole. Chiquita said some of its employees have shared pricing and volume information with competitors over many years and may have violated EU competition law. The EU, the world’s biggest banana importer, is preparing to scrap its banana quota system and replace it with tariffs following complaints from Latin American producers, led by top grower Ecuador.
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Mesa Sets Election Date
Bolivia’s President Carlos Mesa called elections for a constituent assembly that will decide on calls for greater regional autonomy and changes to a hydrocarbon law. The elections will take place October 16. Last week thousands of protesters marched through the streets of La Paz and blocked highways with tree trunks, boulders and flaming tires to pressure for a constituent assembly, higher taxes on oil and gas output and nationalization of the hydrocarbon industry.
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Julio de Quesada, Director of Corporate Banking at Banamex Citigroup, has confirmed his participation on a panel on
Public and private sector leaders will discuss and debate the transition of Mexico — one of only three Latin American investment grade countries — from an emerging to a “converging” market. The “Cumbre Financiera Mexicana” is a high-level and spirited debate and discussion on the ever-changing face of Mexico’s dynamic financial markets. The invitation-only event will provide a unique forum for investors, financiers, government and corporate leaders to network, analyze shared challenges, and identify new opportunities. To apply for an invitation click here.
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Pemex Mulls Foreign Projects
Mexican state-owned oil company Petroleos Mexicanos (Pemex) is considering opportunities to expand operations outside Mexico. Energy Minister Fernando Elizondo said the company is studying gas exploration projects in Peru and Bolivia and is looking to build a refinery in Central America, possibly in Guatemala. Pemex is benefiting from high oil prices and voracious demand from the US, but will likely have to issue more debt as it looks to expand production.
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Volcan Strike Ends
Workers at Volcan Compañia Minera, Peru’s biggest zinc and lead miner, ended an eight-day strike Friday after the company granted each a one-time $300 bonus. About 2,200 workers returned to work at the Cerro de Pasco and Yauli mines in the central Andes after beginning a strike to demand 8 percent of the company’s 2004 earnings. The two mines affected by the strike, which account for three quarters of Volcan’s output, were operating at 50 percent capacity during the strike.
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Alfa to Cut Debt
Alfa, Mexico’s second largest industrial company, will use $1 billion from steel asset sales to cut debt rather than boost dividends, company officials told investors in the US and Europe. Alfa recently agreed to sell its stake in steelmaker Hylsamex to Argentina’s Techint for $2.25 billion and its 4.5 percent stake in Venezuela’s Siderurgica del Orinoco for $107 million.
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Genworth Financial will be hosting a workshop on Mexico’s promising mortgage insurance market at LatinFinance’s Inaugural “Cumbre Financiera Mexicana” on July 13-14 in Mexico City
Despite Mexico’s thriving real estate and construction sectors, the market has thus far lacked any mortgage insurance products. A bill before Congress will make such products available for the first time, for which analysts are predicting an expansion in both primary lending and secondary market activity. The “Cumbre Financiera Mexicana” is a high-level and spirited debate and discussion on the ever-changing face of Mexico’s dynamic financial markets. The invitation-only event will provide a unique forum for investors, financiers, government and corporate leaders to network, analyze shared challenges, and identify new opportunities. To apply for an invitation click here.