Mexican Newslink

Mexico

Posted by BradyNet (Thursday, November 18, 1999)
Mexican Newslink

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05-09-00 Pinto: Mexico's IPAB bank deposit guarantee agency said on Monday it was paying off ahead of time a promissory note held by Citibank worth 24.844 billion pesos. The promissory note was handed over to Confia in 1997 when IPAB's predecessor, Fobaproa, took on bad bank debts left on Confia's books when the 1994-95 peso crisis pushed up interest rates and made millions of debtors default

05-04-00 JG: Grupo Financiero Banamex-Accival SA (Banacci), la principal instituci�n financiera de M�xico, lanz� el mi�rcoles la primera oferta hostil de compra que se recuerde en el mundo corporativo del pa�s. Banacci anunci� su intenci�n de fusionar sus operaciones con el n�mero dos del mercado mexicano, Grupo Financiero Bancomer SA, para crear el grupo financiero m�s grande de Am�rica Latina.

El sorpresivo anuncio trata de desbaratar la ya anunciada fusi�n entre Bancomer y el espa�ol Banco Bilbao Vizcaya Argentaria SA (BBVA). Para ello, la oferta de Banacci -que ofrece un compromiso de recapitalizar de Bancomer por US$2.400 millones- es casi el doble que la de los espa�oles.

03-31-00 Pinto: Canada's Bank of Nova Scotia (Scotiabank) has landed a bargain in the purchase of 45 percent of Mexico's Inverlat for just $40 million.It was really a bargain for them. They paid a total of $215 million for a totally cleaned up institution...What more could they ask for?

03-27-00 manya: Mexico has the biggest short-term debt (burden) of any Latin American country. Mexico's roughly $45 billion of short-term foreign debt and its low external liquidity ratio -- foreign exchange reserves in 1999 would have covered just 50 percent of short-term debt plus annual debt servicing costs -- rendered it vulnerable to external shocks

03-24-00 JG: Y estan abriendo los paraguas. "Mexico Finance Minister Jose Angel Gurria assured bankers in New York on Friday that the government will do everything possible to ensure a smooth transition to a new administration following July presidential elections.

"The quality of transition will be guaranteed by this administration and we are fully committed to democratic normality," Gurria told bankers and bondholders at a meeting organized by the Council of the Americas. "

03-08-00 manya: Investment grade: curse or cure for Mexico?

Commentaries apreciated.

http://www.bradynet.com/bbs/mexico/...

03-07-00 Pinto: A strong economic performance over the last few years and expectations that presidential polls will not bring economic catastrophe could encourage Moody's to upgrade Mexico to investment status before July's general elections, a Moody's analyst said on Monday. Mexico's foreign currency debt is rated Ba1 by Moody's, one notch below Baa3, which is the lowest investment-grade rating. Investment grade means there is less risk of creditor governments defaulting on debt and Mexico would be the first among its major regional peers -- Brazil and Argentina -- to make the grade.

03-02-00 JG: El mercado hoy ha estado m�s dirigido por las emisiones que por las noticias. Parece que hay un apetito significativo por deuda de mercados emergentes en Europa denominada en euros. La colocaci�n de M�xico, la primera en euros que realiza ese pa�s en este a�o, tuvo un diferencial (spread) de 210 puntos base sobre la tasa referencial German Bund. El bono cerr� el jueves con un spread de unos 206 puntos base despu�s de llegar hasta 202 puntos base durante el d�a.

03-02-00 JG: NEW YORK, March 2 (Reuters) - Market speculation about an imminent upgrade of Mexico by Moody's Investors Service pushed the country's bond prices higher Thursday, traders said, but not all investors believe an upgrade to investment grade is warranted before the country's July 2 presidential election.

"The chatter on the street is Mexico will be investment grade in a matter of days," one New York emerging market fund manager said.

"But we think an upgrade before the election is premature," the fund manager said. "They'll probably get it -- the language from Moody's has been pretty strong -- but one of the biggest risks in emerging markets is politics and politics are most volatile around elections."

Moody's declined to comment on the market rumors.

Moody's put Mexico on review for possible upgrade on Feb. 2. Mexico's foreign currency debt is rated Ba1 by Moody's, one notch below Baa3, which is the lowest investment grade rating.

In general, Moody's attempts to complete ratings reviews within three months of their announcement.

"We will aim at completing Mexico's review withing the normal time," said Moody's Mexico analyst Ernesto Martinez-Alas. "Seventy-six percent of issues placed on review for upgrade are actually upgraded, according to the company's statistical analysis."

03-02-00 JG: David Sekiguchi, emerging market strategist at JP Morgan, said the Mexico portion of the EMBI-Plus index would tighten by 25 basis points or more on news of a Moody's upgrade. Mexico would benefit dramatically from the upgrade because such a move would allow a new class of investors to buy the country's bonds.

"It may happen tomorrow or it may happen in two months. The only thing we feel confident about is it will happen by May 2," Sekiguchi said.

Mexico spreads were 29 basis points tighter at 327 bps over U.S. Treasuries on Thursday, according to the EMBI Plus. Mexico UMS-26 bonds <MEXGLB26=RR> rose 3-3/8 to bid 127-7/8 Thursday.

"I don't think Moody's is waiting for any specific event, so they could pull the trigger at any moment," said Siobhan Manning, Latin American debt strategist at PaineWebber.

Standard & Poor's rates Mexico's foreign debt BB with a positive outlook, meaning that over one to three years, S&P may upgrade the rating. The next step up on the S&P scale would be BB-Plus, the highest speculative grade rating.

03-02-00 manya: M�xico se convirti� el mi�rcoles en el �ltimo pa�s latinoamericano que recauda fondos en euros, al vender una emisi�n de 750 millones de euros (unos US$723 millones) en bonos a 10 a�os. La segunda econom�a de Am�rica Latina cotiz� la transacci�n para ofrecer un rendimiento de 210 puntos base sobre los Bund por medio de los bancos Credit Suisse First Boston y Salomon Smith Barney. En el mercado secundario, los m�rgenes se redujeron en entre uno y dos puntos base, a medida que las pujantes bolsas de valores aumentaron el apetito de riesgo de los inversionistas. Los bonos mexicanos registran un buen desempe�o en las �ltimas semanas, apuntalados por el repunte de los papeles de deuda de los mercados emergentes y la expectativa de que M�xico pronto recibir� una mejora de su calificaci�n crediticia hasta grado de inversi�n La emisi�n mexicana sigui� a dos exitosas operaciones en euros de Brasil y Argentina este a�o.

02-15-00 Contrarian07: VIP, quien es el due�o de Mexpost?

02-03-00 VIP: Linda historia: Mexpost, el servicio de mensajer�a del Servicio Postal de M�xico, ha encontrado seis posibles compradores seg�n inform� un alto cargo del gobierno. El subsecretario de Comunicaciones Jorge Silberstein dijo que las perspectivas de crecimiento del comercio a trav�s de Internet han incrementado el inter�s por Mexpost entre las compa��as locales y extranjeras. Entre las interesadas se encuentran la estadounidense United Parcel Service of America (UPS), el minorista mexicano Grupo Elektra SA, la compa��a de bebidas Fomento Econ�mico Mexicano SA, el conglomerado mexicano Desc SA y Grupo Bal, la empresa que controla la minera de plata Industrias Pe�oles SA. Las ofertas por Mexpost tienen que estar listas para el 23 de marzo, y se espera que el ganador sea anunciado para el 29 de marzo.

02-01-00 Watcher: "Mexican bonds have been performing well as the negative implications of higher US interest rates has been offset by expectations of upgrades of the sovereign rating. The major rating agencies have recently indicated their differing views on the country�s creditworthiness. As a result we believethat a split-rating will materialize before year end. S&P'snext move (possibly before year-end) will likely be from BB to BB+, leaving the rating one-notch below investment grade. However, it appears likely that Moody's, which currently rates the country at Ba1, will upgrad by one notch to investment grade, Baa3. This still leaves scope for further upside, and we would continue to build positions on dips." From major EM dealer.

01-31-00 Rodolfo: La deuda externa de Mexico lleg� a 83.148 millones de d�lares a septiembre de 1999, equivalente a 17,5 por ciento del Producto Interno Bruto(PIB), de acuerdo con el �ltimo reporte de la Secretar�a de Hacienda. M�xico s�lo deber� cubrir en el 2000 un total de 2.482 millones de d�lares. Las amortizaciones que hay para este a�o parecen relativamente manejables dadas las condiciones de los mercados financieros internacionales. La cuenta mexicana tampoco es la mayor de la regi�n: Argentina adeuda 115.000 millones de d�lares y Brasil, el gigante latinoamericano, debe al exterior m�s de 100.000 millones de d�lares.En el 2000 la proporci�n de los intereses de la deuda externa mexicana como porcentaje del gasto neto ser� de 17 por ciento frente al 18,3 por ciento de septiembre de 1999, lo que evidencia que el peso de los adeudos ha disminuido.Los vencimientos de la deuda debidos en los pr�ximos 12 meses son insignificantes.

01-28-00 manya: MEXICO CITY, Jan 28 (Reuters) - Mexico's major banks kicked off 2000 on a heady note, topping expectations in their fourth-quarter earnings, but moribund lending is likely to continue to be the killjoy for the next six months.

01-26-00 Watcher: While the new �Bono� has an attractive 3-year maturity, which allows investors to take advantage of Mexico� s declining inflation environment, yields are relatively expensive on this bond. Over its 3-year life, the bond will yield dollar-based investors the difference between its yield and the depreciation of the peso over 3 years. Assuming steadily declining inflation in Mexico to 10% in 2000, 7.5% in 2001, 5% in 2002 and assuming a steady 2.5% inflation rate in the US, we would have a total peso depreciation of 15.3% over the next three years . This would give investors an effective dollar yield of aaprox 12% on the Bono. At only 53 bps above the yield on a dollar denominated local bond in Argentine (Bonte � 02) which matures in May 2002, over oneyear before the Bono, there little upside on this bond.

Stick to 3 and 6-month
Cetes. With the recent increase in interest rates and with the recent blip in the peso, these investments provide attractive projected hold-to-maturity returns.

01-26-00 Watcher: Banco de Mexico on Tuesday successfully placed three-yearfixed-rate bonds at its weekly Cetes, or T-bill, auction, and officials said the result had demonstrated faith in the Mexican economy. The 1,092-day federal bonds will pay 17.70 percent interest. The Finance Ministry said demand was 5.387 billion pesos, 5.4 times more than the amount of debt on offer.

01-21-00 Watcher: Mexico launched a $1.5 billion 10-year global bond on Friday, kicking off its 2000 international bond sales with a heavily oversubscribed offering. The deal went extremely well. Investors are showing strong appetite for Mexican paper. Bankers said investor enthusiasm for Mexican debt reflected the country's positive growth prospects and mounting expectations of an upgrade in the sovereign's ratings later in 2000. Instead of pressuring prices, the country's new global bond offering boosted Mexico's outstanding debt, traders said. Mexico's 2009 dollar deal narrowed to around 306 basis points over U.S. Treasuries mid-Friday from 320 basis points earlier in the session.

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