650+ Senior Global Banking & Markets Attendees

350+ Pre-Arranged Business Meetings

89% Director Level or Above

110+ Industry Expert Speakers

Benefits of Attending

Related Content: Latin American Corporates Quarterly Rating Trends Dashboard – July 2024

Downgrades and upgrades occurred during 2Q24 in nearly every Latin American country and corporate subsectors. There were four fallen angels and one rising star during 2Q24, compared to no cross-over credits during 1Q24 and three fallen angels and no rising stars during 4Q23.

Most of the downgrades to speculative-grade from investment-grade were due to the downgrade of Panama’s sovereign rating to ‘BB+’ from ‘BBB-’. The deteriorating operating environment strengthened the linkage between company credit profiles and the sovereign rating. Either full or partial corporate government ownership of the company or its systemic receipt of government subsidies and financial support was an additional consideration. The rising star was a Mexican company in the building & construction sector.

As of June 2024, three publicly rated issuers in our Latin American corporates portfolio were rated ‘BBB-’/Negative and at risk of falling into high-yield territory. Only one was rated ‘BB+’/Positive, indicating it could be upgraded to investment grade.

For more information on corporate issuers on the edge of different rating categories see Global Corporate Credits on the Cusp Monitor – June 2024.

This year’s event, which took place in Miami’s Coconut Grove featured:

• 412 Senior Attendees
• 186 Institutions
• 51 Expert Speakers
• 200+ Pre-Arranged Meetings
• 160+ Issuers/Borrowers & Investors
• 32 Countries Represented

The organizers, GFC Media Group has already started planning for next year’s event which is taking place on the 27th & 28th of this November at The Ritz-Carlton Key Biscayne, Miami (please add this event to your calendar by clicking the add to calendar buttons below).

To discuss participation in this year’s event, please contact: Francisco.Vasconcelos@GFCMediaGroup.com.

Add the 2023 event to your calendar:

Fitch says that it took into consideration that the company will maintain its market share in both mobile and fixed services through investments and renewals in the network. This dynamic should support EBITDA generation and stable leverage. Telefónica Movistar is the second largest telecommunications operator in Colombia, offering mobile, fixed and business-to-business (B2B) services.

“Movistar Colombia is part of the life of Colombians, from their devices to their homes and companies, that makes us a privileged actor in the digital transformation of the country, to be able to influence the well-being of workers and our suppliers, allies, shareholders and users in general, we provide them with a value offer that we hope will meet and exceed their expectations. This rating reaffirms that we must continue to position ourselves as a key player in the market, continue to deploy fiber optics in Colombia, with which we hope to reach more than 5.5 million homes by the end of 2024.” said Fabián Hernández, CEO of Telefónica Movistar Colombia.

The event is the most senior corporate and investment banking event focused on institutional debt in Latin America and The Caribbean. As usual, Finance Colombia was in attendance. This year’s event took place at The Ritz Carlton Coconut Grove in Miami.

Feedback on the event has been very positive. Baruc Saez of Itaú bank said to “share views, hear opinions and exchange ideas with other banks, issuers, rating agencies and investor. I think it’s a great forum – it is not very often we go to an event where you meet so many different players and participants. It is the only one in the region where we can go and meet the issuers, rating agencies and the investors in a very open dialogue.”

412 professionals attended the event this year representing 186 companies from 32 different countries and territories. A date for next years event has not yet been made public, but interested attendees and exhibitors can contact GFC Media here.

To view the latest agenda, speakers and companies that participate, download the brochure here: https://bondsloans.com/events/latinamerica#brochure

To register as a delegate and take advantage of our discount please register online here or contact Andrew Stark on Andrew.Stark@GFCMediaGroup.com and quote our unique code: FC20

GFC Media Group is a leading producer of financial conferences, online market intelligence platforms and awards, which in turn facilitates idea-sharing and networking between corporates, SMEs, government entities, advisors, regulators, bankers and funds. At GFC Media Group our aim is to improve connectivity between companies looking to raise capital and investors seeking to deploy it.

 GFC Media Group Press / Marketing contact:

Andrew Stark

GFC Media Group
Tel: 44(0)20 7045 0923
Email: Andrew.Stark@GFCMediaGroup.com

 Finance Colombia is a media partner with GFC Media for this event.

The underlying asset was the tunnel that links Medellin with the international airport. Back in the mists of time there was only a single lane road for visitors to traverse, then around a decade ago half the route was upgraded to a double lane highway which reduced the travel time to around an hour. Then in August 2019, El Condor, after years of studies, investigations, appeals and finally constructions, inaugurated the longest tunnel in South America – which they soon after sold to Grupo Argos/Odinsa.

The object of this week’s exercise was to reduce the cost of debt related to the purchase and that was successfully achieved with total demand of $305 million USD for the 8 year bonds at a bid/cover of 1.66x. It has been a very busy week for the group who announced just a few days ago a strategic alliance with Macquarie, one the largest infrastructure players in the world – they will jointly drive ahead a portfolio of assets valuing $1.4 billion USD, that work may include the expansion of the aforementioned tunnel due to its success.

Rupert’s opinions & analysis as an independent expert contributor are his own and not necessarily those of Finance Colombia or the BVC.

Perhaps the only disappointment here was the time that it has taken for Colombia to wake up to the possibilities when it comes to funding large scale infrastructure projects. More years ago than I care to remember, I can recall merrily trading equity names from all over Asia that were directly related to highway projects and even today there are Bloomberg screens with lists of stocks such as Bangkok Expressway, Zhejiang Expressway or even Central Nippon Expressway. As we can see, whilst there is little imagination when it comes to names, we are talking about multiple countries to which we can add Malaysia and India as well as many others. As well as stocks there are bonds, derivatives and warrants.

The root of this was the enormous mega-structure build out across the Asian region in the 1980’s & 1990’s which still continues to some extent, but for some years now Colombia’s 4G program has been one of the largest infrastructure projects on earth. As overseas funds visited and heard the story of the 4G build out, the subject of financing would come up in conversation.

As experienced emerging market investors there was some incredulity that there was no way to invest directly in these projects, neither the equity or bond markets were open to them – Asian governments had spoiled them.

Hopefully as 4G becomes 5G and 20G one day down the road, the authorities, investment banks and the consortium involved can think a little further out of the box and perhaps circumvent much of the stress involved with the financing of 4G.

Odinsa has demonstrated the appetite that there is to get involved, perhaps easier given that the tunnel is already revenue generating, however no doubt the risk reward could be suitably adjusted in order to attract investors at an earlier stage of projects; given they are government driven the risk is anyway somewhat mitigated.

Here is hoping that Bogota Metro or Cali Freeway will one day be names we might all buy and sell in the market.

That is about it for today – remember these are just themes that jump out at me – please refer to your local analyst, economist, salesperson or soothsayer for more details.

My regards to all,

Roops

RATES: By the end of 2020, 50% of analysts foresee an increase of 25bps in rates to 2% whilst 27.8% are expecting no change. In 12 months’ time, the consensus is that the Central Bank will have increased rates to 2.50%.

GROWTH: Expectations continue to grow. For 2020 the consensus is now at 5.5% – up 0.2% MoM. This is still below the Government’s 6% projection, but we are moving in that direction.

INFLATION: The May reading of 3.30% was much higher than expected and it is expected to rise again to 3.60% in June. The YE expectation is now for 3.68%, a large increase from the 3.24% a month ago.

Rupert’s opinions & analysis as an independent expert contributor are his own and not necessarily those of Finance Colombia or the BVC.

PESO: The most devilish of all to predict – even for the next month. For the end of 2021 there has been little change – $3600.

MARKETS: Traders are expecting both 2024 & 2028 bond yields to remain solid over the next 3 months. In the case of 2024 77.8% are expecting a yield of 4-5% (4.63% currently) and 86.1% expect the 2028 to trade between 6-7% (6.58%).

INVESTMENTS: Index-Linked Corporate Bonds (47.22%) & those pegged to the Central Bank (41.67%) are the top picks – there has been a jump in local equities from 10% in May to 27.78% in June.

MSCI COLCAP: There is a somewhat cautious tone with the index – close to 85% expect it to rise over the next three months but proportionately more (45.5%) expect a modest increase when compared to last month (35.1%).

PICKS: Financials (85%) and Oil (70%) are the preferred sectors whilst in terms of stocks Ecopetrol (55%), Cementos Argos (40%) & Bancolombia (35%) are the top choices.

Please find below the link to the full FOS report (English):

https://tradersbvc.com.co/categorias/productos?cp=NzE=

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Sticking with the markets the SMCI survey for June reflected an increase in confidence when compared to May.

The overall confidence number stands at 96.97% which is up 5.1% from May – breaking that down we see other improvements.

• The Buy-on-Dips Confidence Index reached 59.26%, which represents an increase of 7.6% compared to the past month and of 15.5% relative to 2020.
• The Crash Confidence Index reached 71.43%, up 5.8% from May and 32.5% versus June 2020.
• Finally, the Valuation Confidence Index reached 90.74%, which was down slightly (0.3%) from May.

Please find below the link to the full SMCI report (English):

https://tradersbvc.com.co/categorias/productos?cp=NzI=

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That is about it for today – remember these are just themes that jump out at me – please refer to your local analyst, economist, salesperson or soothsayer for more details.

My regards to all,

Roops

Finance Minister (Alberto) Carrasquilla is no longer the Finance Minister and has been replaced by the Minister of Commerce Jose Manuel Restrepo, who appears to be ‘on message’ immediately saying that will be no extra taxes that affect the middle and lower classes – that effectively takes out VAT increase and an expansion of the tax base.

That is not going to do the trick, especially in the case of the tax base: This is the third time such a proposal has been withdrawn because of political motivations, but it is a move that eventually has to be made, a country can’t sustain itself with so few paying taxes at source. The problem is that in this instance the additional VAT charges were going to make such a change overtly painful, especially for the middle-income group. This tax base component should be moving ahead – within the OECD Colombia has about the biggest headline corporate tax rate and about the lowest contribution from individuals; that isn’t sustainable. Once again, we are heading for a ‘Band Aid’ solution as opposed to the structural change that the Colombian tax code requires.

Rupert’s opinions & analysis as an independent expert contributor are his own and not necessarily those of Finance Colombia or the BVC.

Again, setting aside the fact that most of those protesting have several other complaints beyond the tax reform, much of the problem has been optics and messaging. The issue now is that having stirred up a hornet’s nest, the government will need to find a solution using the traditional source of most taxes: corporations and the wealthy. There won’t be a lot of sympathy for the second group, nor for the first in reality, but the companies already pay their fair share and further burdening them won’t help the recovery. This time around it may not be headline rates but the removal of subsidies, however it adds up, to the same in the end.

The social uprising (is that too melodramatic?) is being handled with 10 days of meetings involving most everybody in the country. To that end the protesters, the vast majority of whom have been peaceful, have gotten their way. The key is that they are not just listened to, but that action is taken. One of the complaints of those currently on the street is that during the protests of 2019 the same ‘dialogues’ were held, promises made…and nothing happened.

Against the backdrop of the images we have seen, it appears almost churlish to discuss Colombia’s investment grade credit rating, however its removal would have more effect on those protesting than most of them could imagine. For that reason, it is vital—beyond vital—to get a tax reform penned and passed ASAP. The country economically is in a financial hole and cannot afford more lost working days, infrastructure damage or a further loss of confidence.

COVID has ravaged the country, vaccination levels are near the back of the pack, even in LatAm, and people are understandably frustrated by the situation, but the country has to move forward, and the tax reform needs to be re-submitted in an acceptable form in order for that to be achieved. The longer the debate goes on, the further the damage will be. The new cross-bench group who will look at proposals needs to complete their work without delay; ideally something simple so as to avoid lengthy debate. Middle- and low-Income groups need to be made comfortable, frankly whatever it takes to bring some calm, if only because coming down the road are other reforms including the health sector…and there have been plenty of banners to be seen objecting to that process.

Recent macro data has been solid with retail sales and industrial production beating expectations, Confidence levels inching up, and unemployment, while too high, coming down steadily. But all this could be derailed if the government doesn’t work speedily. Both foreigners reading the press and locals looking out of the windows will be equally reluctant to invest if the current situation continues. Inflation edged up in April to 1.95%, no reason to panic but roadblocks over any period of time will only push it higher as goods fail to reach the market.

Finance Minister Restrepo has publicly stated that there is no reason for Colombia to lose its investment grade and that he will be fighting to make that the case. That needs to represent 99% of his priority list right now.

In the markets the COLCAP took a leg down on Monday, as did the Peso. We also have seen benchmark 2024 bonds move from 4.35% to a high of 4.89% since the end of last week. All of these have created trading opportunities with all three products having stabilized and have now recovered some of the losses, but the strength of that recovery will now be proportional to improvement in the situation.

These are going to be long days in Colombia but as ever it is darkest before the dawn.

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That is about it for today. Remember these are just themes that jump out at me. Please refer to your local analyst, economist, salesperson or soothsayer for more details.

My regards to all,

Roops

Above image provided by Rupert Stebbings

“The EPM thing is not true, the manager has been doing a magnificent job in Empresas Públicas de Medellín and will continue to do so,” — Daniel Quintero

But now, Rendón is saying that yes, Quintero has repeatedly sought his resignation. The past year has been tumultuous and controversial for EPM, with mass board resignations, labor unrest, investigations, and at Quintero’s direction, a mammoth lawsuit against contractors currently building EPM’s troubled Hidroituango hydroelectric project.

In a scathing letter sent to the mayor, Rendón, who was until now seen as a puppet and conduit for Quintero’s micromanagement of EPM, acknowledged that the mayor has the right to fire him, but since Quintero instead was asking for his resignation, he would call an extraordinary meeting of the board of directors, all Quintero appointees, to discuss the request and its implications. Though EPM is owned by the city of Medellín, it operates as a multinational corporation owning several subsidiaries in Colombia and throughout Latin America. The utility also operates a telecommunications joint venture, TIGO UNE with international telecom company Millicom and issues billions of dollars of debt on the international capital markets.

Rendon’s letter is shown below translated, with an image of the original in Spanish, following.

Medellín, January 31, 2021

Doctor
DANIEL QUINTERO CALLE
Mayor of Medellín
City

Mister Mayor:

Regarding the request that you have made to me directly and by other means to resign from the position of General Manager of Grupo EPM, I want to express to you that I know and respect your authority legal to remove the official who exercises this position.

However, to the extent that you are requesting my voluntary participation in that decision, I want to express to you that the answer will be given to you officially after hearing from the distinguished members of the Board of Directors of the organization that I guide and evaluate the implications that an untimely exit may cause to all target audiences, and especially, the impact this may have on the capital markets, with the financial, investment and international rating consequences for EPM.

In order to evaluate these implications, and the resignation that you have repeatedly and by various means requested of me, and taking into account what the Framework Agreement for Relations between the Municipality of Medellin – Empresas Públicas de Medellín ESP says, I would like to request an extraordinary and urgent meeting of the Board of Directors.

I think it is necessary to analyze before that collegial body of company management, over which you preside, the possible effects of a resignation or removal, always thinking about the present and the future of EPM.

It is good to remember that the change of General Manager must respond to objective reasons, in accordance with the results of his management, and after carrying out an evaluation based on objective models, as prescribed by chapter 4.7 of the Corporate Governance code:

“EPM has an evaluation methodology for the General Manager, which is described in complementary documents that are part of the“ General Framework of the Group’s Corporate Governance ”, as explained in Annex No.3. In general terms, the Board of Directors carries out a systemic process that allows it to show achievements and challenges of the general manager’s stewardship in terms of their results and methods to obtain them (what and how), being able to use the General Manager’s self-evaluation, the evaluation by of the Board of Directors and the evaluation by the top-level management team; its results will be disclosed in the public rendering of accounts and in the Annual Corporate Governance Report. This mechanism will be applied at least annually.”

With this letter I reply to you and the country of the aforementioned request for resignation.

Sincerely,

ÁLVARO GUILLERMO RENDÓN LÓPEZ
General Manager EPM

CEO Alvaro Rendón Dares Medellín Mayor Daniel Quintero To Fire Him

CEO Alvaro Rendón Dares Medellín Mayor Daniel Quintero To Fire Him