Chilean state-owned copper producer Codelco is backing away from the idea of selling stock to the public in a partial privatization. Executive President Juan Villarzú says he has given up on the idea he floated earlier this year, arguing that the government cannot alone finance the company’s multi-billion dollar investment plans. Codelco’s investment plan for the period 2005-2012 will cost $13 billion- $17 billion.
Category: Paywall
Posted inDaily Brief
Telesp Issued Debt
Brazilian mobile carrier Telesp Celular has begun offering R$1 billion ($411.5 million) in ten-year floating rate bonds in two separate tranches. The bonds will yield 3.3%-4.2% over the 252-day interbank rate. Banco Itaú is coordinating the sale with ABN Amro Real, Santander, Citibank, HSBC, BB Banco de Investimento and Pactual will as co-managers. The offering was rated ‘brAA-‘ by Standard & Poor’s.
Posted inDaily Brief
Vale Finds Partners
Brazil’s Companhia Vale do Rio Doce, the world’s largest iron-ore producer, and two Korean steelmakers announced they will invest $2.75 billion to build two blast furnaces in Brazil to meet rising demand for steel spurred by China’s economic boom. Posco, the world’s fifth-largest steelmaker, agreed with Vale to build a $2 billion, 4.5 million-metric ton a year mill in Maranhão state. Dongkuk Steel, Korea’s third-largest steelmaker, plans to join Vale and Italian steel-mill equipment maker Danieli to build a $750 million, 1.5 million-metric-ton a year mill in Ceará state.
Posted inDaily Brief
Argentina Begins Swap
Argentina has begun swapping defaulted bonds for new securities after overcoming legal challenges to the exchange that will end its four-year default. The debt exchange is a also condition for reviving a $13.3 billion loan accord with the International Monetary Fund, which abandoned talks almost a year ago pending the restructuring. Finance Secretary Guillermo said this month the country might resume selling international bonds after the restructuring.
Posted inDaily Brief
Salinas Pliego in Trouble Again
Mexican Finance Minister Francisco Gil Diaz asked prosecutors to bring criminal charges against billionaire Ricardo Salinas Pliego because he used privileged information to trade shares. Salinas Pliego (no relation to the disgraced former president) owns TV Azteca, and a banking and retail empire. In a separate case, Mexican regulators fined Azteca, Salinas Pliego and board member Pedro Padilla $2.3 million for securities law violations. The government’s latest case against Salinas Pliego goes beyond civil charges filed by the SEC, which in January accused him and Azteca of securities fraud for his part in a deal that earned him $109 million. The government’s case will test Mexican legislation for the first time since it made insider-trading a criminal offense. The charges carry a prison term of two to seven years. TV Azteca has separately filed a criminal suit against Gil Diaz accusing him of trying to block a program criticizing a 1994 government bailout of Mexico’s banks and the 2001 sale of Banamex to Citigroup for $12.5 billion.
Posted inDaily Brief
Shakeup in Brasília
Senior officials at the Brazilian Finance Ministry and Central Bank have quit unexpectedly. Marcos Lisboa, undersecretary for economic policy at the Finance Ministry has left and will be replaced by Bernard Appy, a close aide of Finance Minister Antonio Palocci. At the Central Bank, Eduardo Loyo resigned from the Central Bank where he was director of special studies and a voting member of the monetary policy council, to join the International Monetary Fund as Brazil’s representative. Neither change is expected to have a significant impact on government or Central Bank policy.
Posted inDaily Brief
Venezuela Tightens Control
Venezuela’s Central Bank has announced fixed maximum lending and minimum deposit rates for commercial banks, which will take effect May 1. Banks will have to cap lending rates at the equivalent of the Central Bank’s discount rate minus 50 basis points. With the discount rate at 28.5%, banks will have to limit the rates they charge to 28%. Banks will also have to pay a minimum of 6.5% on saving accounts and 10% on certificates of deposit of 28 days or more.
Posted inDaily Brief
Brazil Primary Surplus Hits Record
Brazil’s primary budget surplus, which excludes interest payments, rose to a record R$12.26 billion ($4.9 billion) in March on strong tax revenues and government controls on social security spending. The surplus was 19% up on the same period last year.
Posted inDaily Brief
Brazil Sees Higher Inflation
Brazil’s Central Bank said it’s ready to raise the benchmark lending rate for the ninth time since September because rising oil prices are fueling inflation. The bank’s monetary policy committee last week raised the benchmark rate to an 18-month high of 19.5%. According to minutes of the meeting a continued rise in oil prices will force the government to raise domestic fuel costs. Also, a drought in the south of the country may push food prices higher and utility rates may rise more than expected.
Posted inDaily Brief
Chávez Boosts Minimum Wage
Venezuelan President Hugo Chávez said he will raise the minimum monthly salary 26% to $189 per month after record oil prices boosted government revenue this year and last. A 61% surge in government spending helped fuel economic growth of 17% last year after contracting 7.7% in 2003 and 8.9% in 2002. The Central Bank is predicting 11% growth for the first quarter.