Perusat, the Peruvian subsidiary of telecom ChinaTel, has entered into a partnership with Hong Kong-listed peer ZTE. ZTE will provide Perusat infrastructure equipment, consumer terminals, and engineering and management services for the wireless broadband network Perusat is deploying in Peru. The value of the contract is expected to be around $48m over the next 7 years. ZTE is financing 85% of the cost of infrastructure equipment covered in the first phase of the partnership, expected to require around $7m. National banks in China with whom ZTE has relationships are expected to finance 85% of future phases. The first phase of deployment, in which Perunet expects to expand coverage to 7 cities, should be complete by May, it says.
Category: Peru
Posted inDaily Brief
IIC to Increase Local Bond Issuance
The IIC seeks to increase its bond issuance in the local capital markets of Colombia, Mexico and Peru over the next 3 years, Steven Reed, deputy general manager of the IIC tells LatinFinance. He expects an increase in demand for local currency loans, which currently make up 15% of IIC’s lending portfolio, but grow to 25%-30% in the next 3 years. “Through doing local currency transactions we will be able to help finance a broader range SMEs that are not exporters,” says Reed. “The macroeconomic circumstances in the region and the increase in investment activity provide good opportunities to participate in those markets, and means we can help development,” he adds. Reed says that it is still difficult for many mid-market companies in the region to obtain bank financing. The IIC currently lends $400m and mobilizes an additional $400m in the region. It is looking to boost lending by 40%-50% in the next 3 years, says Reed.
Posted inDaily Brief
BCP Eyes Further Funding
Banco de Credito del Peru (BCP) has finished its issuance for this year but will likely return for more in 2011. “We’re always looking for funding,” Gonzalo Alvarez-Calderon, BCP’s head of international business, tells LatinFinance. He adds that BCP has been seeing 20% annual loan growth, which it will continue to support by borrowing. The bank has not decided how much it will look to raise next year. It recently closed a $350m 3-year syndicated loan priced at 175bp over Libor, which it upsized from an original $300m. The deal via Citi and Standard Chartered was syndicated to 16 banks, including Chang Hwa, Bank of Taiwan and Malayan Banking Berhad. Alvarez-Calderon says the leads were incentivized to bring in Asian institutions. Total demand was $387m. The deal is for general corporate purposes, in particular to fund loan growth. The facility follows an $800m September issue of 2020 bonds. The BBB/Baa2 deal priced at 99.763 with a 5.375% coupon to yield 5.406%, or UST plus 265bp, the tight end of 275bp area guidance. Bank of America Merrill Lynch and Deutsche Bank managed the sale, the first bond from BCP since a $250m hybrid in November 2009.
Posted inDaily Brief
Peru Leaves Rate Unchanged
Peru’s central bank left its rate unchanged at 3.00%, in line with expectations. The bank says it decided to leave rates on hold as annual inflation in October was negative for the second consecutive month, primarily because of a drop in food prices. Celfin expected the rate to stay on hold, also citing falling consumer prices. Morgan Stanley expects the bank to pause for the remainder of the year. It had previously expected to rate to be tightened to 4.00% by the end of 2010.
Posted inDaily Brief
Investors Pounce on Peru Dual Currency
Peru has sold $2.5bn-equivalent in bonds, offering yield-hungry investors a crack at a liquid part of its PES curve. The sovereign raised $1.0bn in new 2050s and $1.5bn equivalent in retapped sol-denominated 2020s, with investors placing $5bn in orders, according to a banker on the deal. The Baa3/BBB+/BBB global 7.84% of 2020 reopened at 114.718, to yield 5.750%, at the tight end of 5.875% guidance. “There are 2 spots on the local yield curve that offer strong liquidity, and the 2020 is one of them,” Roberto Sanchez-Dahl, a debt portfolio manager at Federated Investors, which manages $1.1bn in EM fixed income, tells LatinFinance. He says there is some pickup in the retap, with the 2020s trading to yield 5.40%-5.50% prior to the announcement. The Baa3/BBB minus new 2050 priced at 96.164 to yield 5.875%, in line with 5.875% area guidance. This also offers a pickup to the outstanding 2037s, the closest comp on Peru’s curve, which traded at 5.15%-5.20% at Tuesday’s announcement, according to investors, who note the comparison is tricky given the 13-year difference. The dollar bond was heard up a point Wednesday afternoon, according to traders. “The PES is one currency in the region that is super stable,” says a participating New York EM investor. He adds that the PES bond also offers about 80bp in pickup to the comp from Colombia. Bank of America Merrill Lynch and Morgan Stanley managed the sale. Peru follows Brazil, Chile and Colombia in issuing global local currency bonds this year, as historically low interest rates in developed economies and poor performance of hard currencies has led investors to seek higher yields in local currency. Brazil has communicated its intention to return to global BRL issuance in the next few months, and Colombia is rumored to be bringing another global TES.
Posted inDaily Brief
BBVA Peru Hits Wide End
Peru’s BBVA Continental has raised less than expected from a $300m bond sale during a challenging day full of bad headlines about European sovereign debt and Brazilian banking concerns. Continental sold $300m of the new 2020s, after communicating a “benchmark” size the day before, on the back of more than $700m in demand, according to bankers on it. The BBB/BBB minus 2020 priced at 99.220 with a 5.500% coupon to yield 5.603%, or UST plus 300.0bp, the wide end of 287.5bp area guidance. Investors say it was impacted by worries about sovereign in Portugal and Ireland, as well as news of Brazilian Banco Panamericano’s emergency funding injection. Credit Suisse and Deutsche Bank managed the sale. The bank is raising funds for general corporate purposes.
Posted inDaily Brief
Goldman Expects Peru to Maintain Rate
Goldman Sachs expects Peru’s central bank to maintain its policy rate at 3.0% today, in line with market consensus. Goldman says in a report that consumer prices fell 0.14% in October, the second month in a row Peru experienced negative inflation. Goldman sees the 3.0% rate as stimulative, but not exceptionally so. Lacking inflationary pressure, the central bank will remain comfortable at this level for sometime, Goldman says, with a hike not coming until the first quarter of 2011.
Posted inDaily Brief
BBVA Readies Bond
BBVA Continental is preparing a benchmark-sized 2020 issue. The deal is whispered at UST (2.72% yesterday) plus 287.5bp area, according to an investor following it. The Peruvian bank is expected to price this week, possibly as soon as today, according to bankers on it. BBVA, Credit Suisse and Deutsche Bank are managing the sale, rated BBB/BBB minus. It follows the $200m Continental raised in September through the issue of 7.375% of 2040 NC10 step-up bonds. The bank is raising funds for general corporate purposes.
Posted inDaily Brief
Peru Set for Double Tap
Peru is readying a dual-tranche bond issuance of at least $1bn, set to price today. Both tranches are expected to be at least $500m or equivalent in size. The sovereign is issuing new 2050 bonds and retapping a 7.84% of 2020 PES-denominated issue. Whispers on the Baa3/BBB minus 2050 dollar portion are in the high 5.00% area yield, according to investors, who note this would mean some pickup to the 2037s trading to yield 5.15%-5.20%. Talk on the Baa3/BBB+/BBB sol-denominated retap is heard at 6.00% area, with the 2020 trading to yield 5.40%-5.50% prior to announcement. Bank of America Merrill Lynch and Morgan Stanley are managing.
Posted inDaily Brief
Peru to Get IDB Loan
The IDB has approved a $110m loan to Peru to reduce poverty by strengthening its principal social protection and labor programs. The loan comes from IDB’s ordinary capital and has an amortization period of 20 years with a 5-year grace period and an interest rate based on Libor.