In a positive development for weaker Latin American corporate issuers, Vitro SA has mandated Credit Suisse First Boston and HSBC Securities to offer its international bonds in the coming months, it wa…
In a positive development for weaker Latin American corporate issuers, Vitro SA has mandated Credit Suisse First Boston and HSBC Securities to offer its international bonds in the coming months, it was reported on 22 March. The source declined to specify the exact timing, size or maturity of the bonds, but the proceeds will refinance some of the Mexican glassmaker“s US$ 670 million in short-term debt. Included in that portion are US$ 175 million of bonds Vitro has coming due in May 2002, which the company could potentially refinance at least in part from the cash it gets by selling its Acros-Whirlpool division for between US$ 150 million and US$ 160 million. Vitro“s bond offering is good news to the Latin corporate bond markets, which were shut to weaker credits such as Vitro for most of 2001, when Argentina“s crisis and the global slowdown made high-default risk and illiquidity an unpopular bet. Analysts have given Vitro better assessments in recent months as the world“s sixth largest glassmaker changed its aggressive growth strategy. Santander Central Hispano said on 22 March that it had raised its recommendation on Mexican glassmaker Vitro SA to “hold“ from “underperform.“ The upgrade was based on the stock“s new valuation following the divestion news. Santander analyst Luis Miranda thinks the stock can sustain its current valuation. Miranda has also raised his year-end price target for Vitro“s American Depositary Receipts, which trade in New York, to US$ 3.40 from US$ 2.70 per share. These valuations allow for an upside of about 11%, outperforming Santander“s expectations for Mexico“s key IPC stock index, which the bank expects to gain 6% this year.