Friday, January 26, 2007

Argentina Breaks 8%

Argentina took advantage of market conditions to place the third tranche of its dollar-denominated Bonar VII bond issue, Thursday, achieving a yield of 7.71% - at the low end of market expectations. The sovereign sold $500 million of the seven-year paper, which matures December 2013. The Republic last issued the securities in November when it achieved a yield of 8.03%. The government has $500 million left of the $2 billion program. Argentina’s external financing needs in the first quarter of this year total $3.76 billion.

Thursday, January 25, 2007

Argentina Takes Bids For Bonar VII





Argentina will auction the third tranche of its dollar-denominated Bonar VII bond issue today, Thursday, according to the economy ministry. The sovereign is offering $500 million of the seven-year paper, which matures December 2013. The Republic last issued the securities, which carry a coupon of 7%, in November when it achieved a yield of 8.03%. This time around, Argentina will be looking for a yield of around 7.8%, say analysts. The government has so far issued $1 billion of a total $2 billion approved. Argentina’s external financing needs in the first quarter of this year total $3.76 billion. On Wednesday, Argentina’s country risk hit another record low, dropping to 190 basis points, as measured by JPMorgan’s EMBI+ index.

Wednesday, January 24, 2007

Banco Macro Returns For More





Argentina’s Banco Macro priced Tuesday a $150 million 10-year at par to yield 8.5%. The price was tightened from 8.625% area and the deal was heard trading up marginally on the break. Sole bookrunner was Credit Suisse and orders were heard in excess of $400 million. The deal was rated B2/B+ and highlighted the continued thirst for yield from investors. Proceeds are for general funding. Macro was last in the market in December with a $150 million 30NC5 at 9.75%. Macro started its capital markets comeback in March 2006 with an impressive $300 million IPO.

Tuesday, January 23, 2007

Argentina: Record Exports In 2006





Argentina achieved record exports of $46.6 billion last year, according to figures released by the economy ministry. The 15% annual increase in sales led to an increase in the trade surplus to $12.4 billion, despite the 19% rise in imports to $34.2 billion. GDP growth of around 9% helped drive up the demand for capital goods imports, said the ministry.

Monday, January 22, 2007

S&P Lowers Ecuador Rating To CCC





Ratings agency Standard & Poor’s has lowered Ecuador’s long-term sovereign credit rating to CCC from CCC+ and revised its outlook on the rating to negative from stable. The short-term sovereign credit rating remains C. S&P said its rating action reflected “repeated policy signals by the new administration that indicate significant downside risk to timely debt service on its US$3.86 billion of outstanding global bonds”. Ecuador is due to pay a $135 million coupon on its global 2030s on February 15 (with a 30-day grace period). S&P added that the rating could be downgraded further should the coupon payment be missed and should the government suggest the coupon will not be paid “during the grace period or if an exchange offer is put to investors”.

Friday, January 19, 2007

Argentina Economy Expands 8.5%





Argentina’s economy grew by 8.5% between January and November last year, according to the government. Year on year, the economy expanded by 8.6% in November, driven by construction and industrial production and rose 0.6% on a monthly basis.

Bolivia Seeks Full Mercosur Membership





Bolivia has requested full membership of regional trade bloc Mercosur. However, President Evo Morales, speaking at a press conference in Rio de Janeiro, made it clear that Bolivia would push for changes to ensure that such trading blocs benefit the ordinary people, and not just the business community, in member countries. Bolivia’s application to join, sent to the member countries, currently meeting at a Mercosur summit in Brazil - if approved - will make Bolivia the bloc’s sixth member. Venezuela joined last year. Mercosur member countries comprise Argentina, Brazil, Paraguay, Uruguay, Venezuela; associate members are Bolivia, Chile, Colombia and Ecuador.

Thursday, January 18, 2007

Moody’s Improves Ratings Outlook For Argentina Local Government





Moody's Investors Service has changed the rating outlook to positive, from stable, for two local governments in Argentina. The agency said the action was prompted by a similar, recent, outlook change for Argentina’s B2 foreign currency country ceiling for bonds. The governments and ratings affected are: City of Buenos Aires foreign currency bonds rated B2 (global scale) and Aa3.ar (Argentina national scale). Both were assigned a positive outlook; these ratings are constrained by Argentina's foreign currency country ceiling. The outlook for domestic currency bonds rated B1 and Aa2.ar remains stable, said the agency. Meanwhile, Province of Mendoza foreign currency bonds due September 2018 rated B2 (global scale) were assigned a positive outlook; this rating is constrained by Argentina's foreign currency country ceiling. The outlook for the province's domestic currency issuer ratings of B1 (global scale) and Aa3.ar (Argentina national scale), as well as for its foreign currency bonds due September 2018 rated Aa3.ar (Argentina national scale), remains stable.

Wednesday, January 17, 2007

Moody’s Improves Argentina Outlook





Moody’s Investors Service has raised the outlook on its B3 foreign- and local-currency rating of Argentina’s sovereign bonds from stable to positive. The change was due to “continued improvement in the fiscal accounts that, combined with robust economic growth and substantial accumulation of international reserves, has contributed to strengthening the government's overall credit profile and to reducing external vulnerabilities”, according to Moody’s. An outlook change to positive from stable was also made to Argentina’s B2 foreign currency country ceiling for bonds and to the Caa1 ceiling for foreign currency bank deposits. Unaffected by the rating action is Argentina’s Ba1 local currency bond ceiling, the highest possible rating that could be assigned to obligors and obligations denominated in local currency within the country remains stable, as well as the Ba1 local currency deposit ceiling.

Tuesday, January 16, 2007

EDC To Be “Nationalized”





Venezuela’s largest energy company, privately owned Electricidad de Caracas (EDC), is to be “nationalized” as part of a wider program affecting the entire energy sector, according to comments made by the country’s energy minister Rafael Ramírez on Monday. Reuters reported that Ramírez revealed the government is aiming to take control of 86% of the utility controlled by AES of the United States. The state hopes to take over the stake by the end of the first half of this year. AES took control of EDC in 2000 via a hostile takeover amid against a background of falling share prices and political uncertainty. The new government of Hugo Chávez did nothing at the time to block the sale.

Monday, January 15, 2007

Mexico Swaps Dollar Debt





Mexico said it succeeded in buying back $2.8 billion of its dollar debt last week, exchanging it for longer-term debt and cash. The sovereign used $2.39 billion of its reopened global 2034 dollar issue as well as $405 million in cash to buy back less liquid dollar paper from five issues maturing 2019 to 2033. Mexico achieved a yield of 6.27% on the newly issued 2034s, the lowest yet for such a maturity, and takes those globals outstanding in the market from $1.5 billion to $2.8 billion. Barclays Capital and Morgan Stanley managed the sale. According to the government, the swap reduces Mexico’s foreign debt by around $500 million.

Wednesday, January 10, 2007

Venezuela’s Markets Plunge





Venezuela’s markets tanked on Tuesday following the announcement by president Hugo Chávez of further radical plans ahead of his new six-year term in office, which begins Wednesday. Chávez’s comments, which included nationalization plans for the country’s power and telecoms sector, led to tumbling stock and bond prices, Tuesday. The Caracas share index fell almost 19% and the yield on Venezuela’s internationally traded benchmark dollar-denominated 2027 global bond rose to 7.079%. Venezuela’s news was felt in other regional exchanges, such as those in Argentina, Mexico and Brazil, where companies with large investments wait and see what might happen to their holdings. Nevertheless, foreign investors in Latin American equities were urged not to panic. Citigroup, for example, issued a note explaining that the broader implications for foreign investors would be “tiny” given the fact that Venezuela is essentially “non-investible”. Apart from those investors holding ADRs in CANTV, Venezuelan stocks did not make up the broad Latin American investible equity universe after being expelled from MSCI GEMS in 2006, said the Bank. It did, however, caution that Argentina might follow Venezuela’s lead and said it reiterated its “Underweight recommendation on both Venezuela and Argentina within a Latin American equity portfolio”. However, the Bank concluded that its forecast “that regional equities rise by 10-15% in U.S. dollar terms this year is unchanged”.

Monday, January 08, 2007

Bancolombia Scandal Rumbles On





Colombia’s largest financial institution, Bancolombia, has issued a statement following the arrest last week of its president and vicepresident - Jorge Londoño Saldarriaga and Federico Guillermo Ochoa - in which it says it finds “major flaws” in the resolution issued by the General Attorney’s Office on January 4, which authorizes the prosecution of the two men. The Bank emphasized that the decision by the prosecutor “does not affect the equity of Bancolombia or its solvency, its business and operations, or its obligations with its customers and clients”. It also denied any wrongdoing by its officers, as alleged, during the merger of Banco de Colombia and Banco Industrial Colombiano, over 10 years ago. The case has been brought by the Gilinski family, the former majority owners of Banco de Colombia, who sold their shareholding to BIC, for whom Londoño and Ochoa worked, and who claim they were defrauded. Bancolombia’s shares and its ADRs were hit by a sell-off last week after news of the arrests but prices had recovered somewhat by close of trading Friday.

Tuesday, January 02, 2007

Lula Sworn In; Kawall Resigns





Brazil’s president, Luiz Inácio Lula da Silva was sworn in Monday for his second term in office. Lula was re-elected in October in a second-round victory against rival Geraldo Alckmin. The president has promised to prioritize growth and job creation during this second four-year term but has also pledged to keep public spending under control. However, the news last week that treasury secretary Carlos Kawall – an advocate of fiscal restraint and market favorite - had resigned gave little comfort to investors. Although Kawall resigned citing personal reasons, it has been rumored for some time that he was unhappy with the uptick in public spending. Kawall, who took over in March from Joaquim Levy, is replaced by his deputy Tarcisio José Massote de Godoy as interim secretary.

Monday, January 01, 2007

Happy New Year - 1957 - 50 Years - 2007


Bravo & Bravo Losada celebrating 50 Years of innovative professional services.