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Local Market Volumes Tick up

Activity in local treasury instruments rose in the third quarter, with Brazil, Mexico and Argentina leading the charge. Local market volume hit $1.91trn, up 16% from $1.02trn in Q3 2006, and up 7% from $1.12trn from the second quarter. The most frequently traded local market instruments were government bonds issued by Mexico ($309bn), Brazil ($181bn), South Africa ($133bn), Argentina ($100bn) and Turkey ($91bn). Volume in the local treasury instruments in these five countries accounted for 68% of all local market trading. Corporate bond volume retreated to $148bn from the record $213bn set in the previous quarter, but still the second-highest level ever for the survey and a 56% increase from $95bn in Q3 2007.

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Repsol YPF Argentina Offering Shares

Oil company Repsol YPF is to sell 874,586 class ‘D’ shares belonging to a workers group this week, according to a filing with CNV, Argentina’s securities commission. The shares will be offered via Dutch auction on the Buenos Aires Stock Exchange and will be sold via MBA Sociedad de Bolsa. The share price will be set at not less than 90% of the average share price during the last six months, nor below 90% of the share’s closing price on February 6.

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Vitro Sparkles

Mexican glassmaker Vitro came with an upsized $1 billion debt offering Thursday to a standing ovation from the market. The company placed one of the largest high-yield corporate issues in emerging markets and saw orders totaling $5.25 billion. Vitro sold $700 million of 10-year senior unsecured notes due February 1, 2017, callable after year 2012, at 98.4 to yield 9.375%. It also sold $300 million of senior unsecured notes due February 1, 2012, at 99.008 to yield 8.875. The notes will pay interest semiannually and will receive guarantees from VENA and its wholly-owned subsidiaries and Vimexico and its wholly-owned subsidiaries. The notes offering is expected to close on February 1, 2007. The issue was expanded from an original $750 million and means the company will not need to seek additionally financing from bank loans. The money raised will help refinance existing debt and improve its capital structure.

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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.

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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.

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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.

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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.

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Global Crossing Gets The Go-Ahead

US-based telecoms solutions company Global Crossing announced on Wednesday that the shareholders of Argentina’s Impsat have voted to approve its proposed acquisition for $9.32 in cash for each share of Impsat common stock. The proposed acquisition represents a total equity value of around $95 million and includes Global Crossing’s assumption, refinancing and/or repayment of the Argentine telco’s debt, which was approximately $222 million as of end September 2006.

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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.

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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.

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