Mexico’s Fox Seeks to Use Oil Revenue to Cut International Debt
Mexican President Vicente Fox’s proposed spending plan for 2006 seeks to use revenue from record high oil prices to reduce the nation’s international debt to its lowest in more than three decades.
“High oil revenue has a non-recurring nature, so we must use it to strengthen our infrastructure or save it to mitigate the impact of a possible decline in oil prices on public finances and the national economy,'’ Fox, 63, said in a message to legislators in the budget.
Fox’s plan would allow Mexico, the world’s sixth-largest oil producer, to cut foreign-currency debt to 6.8 percent of gross domestic product, “the lowest in the nation’s recent economic history,'’ from 9.8 percent in June. Fox is also proposing that the government posts its first budget surplus in 12 years in 2006, his last year in office, to leave the economy in good shape for his successor.
The president is proposing the 2006 budget be based on an average price of Mexico’s crude exports of $31.50 per barrel, compared with $27 for this year. He said oil revenue that exceed $31.50 per barrel must go to “savings and investments.'’
More: bloomberg.com
Emerging debt-Prices rally on Treasuries; Mexico leads
Emerging market debt prices rallied on Friday, boosted by U.S. Treasuries and led by Mexico, where the government announced its second step this week to reduce its outstanding foreign debt.
Mexican external bonds, which usually move in relatively narrow ranges compared with other major EM credits, roared higher. The benchmark global bond due in 203, jumped 2.500 points to bid 124.50 and the global 2019 rose 4.250 to bid 123.750.
Analysts said the surge was driven by the view that debt will become more valuable as it dwindles in supply.
"It was a Mexico colored day," said
Mexico's Televisa replaces $600 mln in debt
Mexico's No. 1 broadcaster Televisa said on Wednesday it had successfully replaced $600 million in existing debt with identical new paper in a technical operation to comply with U.S. market regulations.
Televisa (TLVSCPO.MX: Quote, Profile, Research) (TV.N: Quote, Profile, Research) said its month-long offer to exchange debt with a coupon of 6.625 percent and maturing in 2025 for identical new paper closed on Tuesday.
"The total amount of old debt was exchanged for new bonds, corresponding to $600 million in new bonds issued today, September 7, 2005," Televisa said.
The operation was a purely technical one
Mexico Buys $2.88 Billion of Central Bank Reserves (Update3)
Mexico's government bought $2.88 billion of central bank international reserves that it will use to help meet payments on all foreign debt coming due in 2006 and 2007.
The funds, which the government acquired by selling pesos to the Banco de Mexico, combined with $1.89 billion the government has available from earlier foreign bond sales will cover the $4.77 billion of foreign debt maturing in the next two years, the Finance Ministry said in a statement. Finance Minister Francisco Gil Diaz said that the dollar purchase will allow Mexico's government to stay
Mexico's TV Azteca to prepay 1.4 bln pesos of debt
Mexico's No. 2 broadcaster TV Azteca said on Friday that this month it will prepay 1.406 billion pesos ($131 million) of debt with local bank Banco Inbursa that is due to expire in 2008.
Azteca (TVAZTCACPO.MX: Quote, Profile, Research)(TZA.N: Quote, Profile, Research), owned by media and retail magnate Ricardo Salinas, said it was funding the debt prepayment with the proceeds of a bond issue in Mexico. ($1 = 10.694 pesos)
More: today.reuters.com
Mexico's Fox to Propose Cutting Foreign Debt a 3rd Year in 2006
Mexico President Vicente Fox will ask Congress to reduce foreign debt for a third year in his 2006 budget proposal, said Alejandro Werner, chief economist for the Finance Ministry.
``This is a policy that has been successful and we will continue in this direction,'' Werner said at a Mexico City news conference.
The government cut foreign debt by $500 million both this year and in 2004. Fox last week said he will propose to Congress in September a balanced budget for the first time during his six- year
Mexico seeks international support against deadly US border wall
US lawmakers proposed to build some 700 miles of barriers to stop illegal immigration from the South.
Sixteen years after the fall of the Berlin wall, another barrier of bricks is being fuelled to separate two nations and stop immigration. A proposal by U.S. lawmakers to build some 1,130 kilometers of barriers along their nation's southern border as part of efforts to stop illegal immigration has irritated Mexicans, who are seeking international support to block Washington's plans.
The Mexican Congress is asking legislatures in Spain, Portugal and Latin American countries to join a coalition
Mexico's Fox to Propose Cutting Foreign Debt a 3rd Year in 2006
Mexico President Vicente Fox will ask Congress to reduce foreign debt for a third year in his 2006 budget proposal, said Alejandro Werner, chief economist for the Finance Ministry.
``This is a policy that has been successful and we will continue in this direction,'' Werner said at a Mexico City news conference.
The government cut foreign debt by $500 million both this year and in 2004. Fox last week said he will propose to Congress in September a balanced budget for the first time during his six- year
Mexico's Cemex sees Q4 EBITDA up 63 pct
Mexico's Cemex, the world's third biggest cement maker, expects a 63 percent rise in fourth-quarter earnings before interest, tax, depreciation and amortization to $950 million after a major acquisition boosted sales, the company said on Friday.
Cemex (CX.N: Quote, Profile, Research) (CEMEXCPO.MX: Quote, Profile, Research) said revenues would be above $3.9 billion in the October-December period, up 95 percent following the $5.8 billion purchase of Britain's RMC Group, the world's largest ready-mix concrete producer.
The acquisition of RMC, the biggest ever by a Mexican company, doubled Cemex's revenue base and handed it new markets in
Mexico to Swap Bonds Today to Lower Foreign Debt
Mexico will swap foreign-currency bonds for domestic securities today, the first part of a planned $3.3 billion exchange aimed at making the countrys finances less vulnerable to declines in the peso.
In todays transaction, investors can turn in as much as $500 million of dollar bonds in exchange for peso debt. Investors in November bought warrants from the government that gave them the option to turn in their dollar bonds for peso bonds. In March, the government sold similar warrants to holders of some bonds denominated in European currencies.
The swaps
Mexicos Carso seeks to delist Sanborns retail unit
Mexican conglomerate Grupo Carso said on Monday it would ask shareholders to make an offer to buy up to 100 percent of outstanding shares in retail unit Grupo Sanborns and delist the company from Mexicos stock market.
Carso (GCARSOA1.MX: Quote, Profile, Research), an industrial and retail conglomerate that belongs to the business empire of Latin Americas richest man, Carlos Slim, said it would offer to pay 26 pesos per share it does not currently own in Sanborns (GSANBORB1.MX: Quote, Profile, Research), for an estimated total cost of 4.1 billion pesos ($376 million).
Source : today.reuters.com
