Cap Cana to go bonds

aegap

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Mar 19, 2005
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Dominican Republic resort Cap Cana to sell $200 M bonds
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New York.? Dominican Republic's Cap Cana tourism resort plans to sell $200 million of senior secured notes to accelerate construction of the first phase of development, according to a syndicate official at Bear Stearns.
The deal size is currently set at $200 million, and pricing guidance should be available by the middle of next week, the official said.
They will be seven-year amortizing bonds with an average life of five years, the person said.
The bonds are expected to be rated at the sovereign ceiling, one notch above recent deals done by Dominican Republic power companies, the person said.
Moody's Investors Service currently has the Dominican Republic's country ceiling at a speculative grade B1, while the sovereign rating is two notches lower at B3. Both Standard and Poor's and Fitch Ratings give the country a single-B rating.
The Cap Cana resort, located next to Punta Cana international airport, covers an area twice the size of Manhattan. According to the company's Web site, the projected total investment is $1.5 billion.
The company will carry out roadshows in London on Monday and Tuesday, Miami on Wednesday and New York on Thursday, the person said.
Pricing could be at the end of next week, subject to market conditions, he said.
The bonds carry a change-of-control put at 101% of principal plus any accrued and unpaid interest.
 

Market Economy

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And the Dominican credit curve grows.

AES
ITABO
Autopistas del Nordeste
Cap Cana
+ 5 Sov. Issuers (including 2 bradies)

This is good because a credit benchmark helps in the credit creation process

Note: This is my personal opinion, an should not constitute investment advice. E-mail me at my personal address if you want to develop a dialogue.
 

Market Economy

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Cap Cana Bonds priced this morning.

Issuer: Cap Cana, S.A.
Amount: US$ 250 million
Coupon: 9.625%, semi-annual, fixed
Issue Price: 100.00
Maturity: 11/03/2013
Principal Payment: 8 equal semi annual payments commencing on 5/3/10
Average Life: 5.25 years (February 3, 2012)
Make-Whole Call: UST + 100 bps
Change of Control: @101% of principal


Note: This is my personal opinion, an should not constitute investment advice. E-mail me at my personal address if you want to develop a dialogue.
 

aegap

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Mar 19, 2005
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ME, what's your personal opinion of it, lol. ..I'm seriously asking for you opinion of it.
 

Market Economy

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Aegap,

I still stand by me previous comment. I think this is a positive developemnt. The country already has a sovereign benchmark for credit. Now the corporate sector is slowly developing one which will be useful, as a reference, for local and external corporate issuances.

I would not be surprised if more local companies decide to come to market now that Cap Cana has done it. Remember, the buyers of these issues prefer companies with US$ earning power, and not many sectors of the Dominican economy check this box (at least for now).


Note: This is my personal opinion, an should not constitute investment
advice. E-mail me at my personal address if you want to develop a dialogue.
 

aegap

Silver
Mar 19, 2005
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If the lay person only understood how news likethis greatly reduces the cost of finances for Dominican companies, specially in this case with Cap Cana, ..whose rate it very well tied to how well DR's economy is perceived to be doing.


News like the following saves Dominican companies who finance with debt/public capital a great lot:

FROM THE ECONOMIST INTELLIGENCE UNIT
The Dominican economy is registering startling growth this year, estimated by the Central Bank to have reached 11.3% during the first three quarters. This should put the country on track to post double-digit expansion of at least 10% for full-year 2006, and place it among a select group of the top-ten fastest-growing economies in the world.
The main drivers this year have been domestic sectors such as construction (up 29.8% during the first three quarters), communications (26%), and agriculture and fisheries (14.9%), according the Central Bank. Only one sector, export-oriented free zones, posted a contraction (-5.4%).

..had Cap Cana seeked these bonds during the previous Dominican administration, it would probably had cost millions of additional dollars to get them.

The following from The Economist article is a nother great reason why:

Meanwhile, officials predict inflation of 6% this year, down from their previous forecast of 7.5%. The Central Bank has maintained a tight monetary stance in order to keep the currency stable and contain inflation despite an unfavourable global environment, marked by high petroleum costs and increases in international interest rates.
 

Market Economy

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Corporate issuers (or non-sovereign issuers in general) always prefer (need) a stable macro-economic environenment where there can issue debt (or equity) as it would, at least, provide for pricing under stable conditions. No issuer prices debt when the UST curve (benchmark of benchmarks) is swingling wildly. This is precisely what is happening with Argentinian issuers, that now that the sovereign issuer is stable are coming to market.



Note: This is my personal opinion, an should not constitute investment advice. E-mail me at my personal address if you want to develop a dialogue.
 

aegap

Silver
Mar 19, 2005
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Exactly! ..had Cap Cana issued these bonds during the previous administration, the coupon rate would have been like 99% percent or something, lol.
 

aegap

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Mar 19, 2005
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How It All Wend Down: Cap Cana completes largest corporate bond issue in DR history

Valued at US $250 Million in 7-Year Bonds at 9.62%, this transaction is considered to be the largest issue by a private corporation in the country.

Santo Domingo.? Cap Cana has just completed the largest international corporate bond issue in the history of the Dominican Republic, at the lowest interest rate ever for a Dominican company in the international arena.

The company issued $250 million US dollars in 7-year bonds at a rate of 9.62%. This is the first time that a Dominican company is financed in the international market at a rate below 10.87%.

In addition, Cap Cana is the only corporate issuer from the Dominican Republic to receive an international B rating by risk assessor Fitch Ratings, making it the highest ranking ever granted to company from this country.

Likewise, Moody's Investors Services gave it an international rating of B3. The success and low cost of the bond issue reflect the perception of reduced risk among foreign investors, the confidence inspired by its executives and the country's robustness for the development of world-class projects such as Cap Cana.

"We are very pleased to see Cap Cana, one of the companies in our consortium, issue bonds worth $250 million US dollars, this demonstrates its unequivocal business drive and its already well-deserved prediction as a successful project, which can only be compared to some of the most select destinations in the world," declared Abraham Hazoury, President of Grupo Abrisa.

"With this new boost of fresh capital, Cap Cana ensures it will continue on its accelerated rhythm of growth and will certainly fully achieve its goals," pointed out Ricardo Hazoury, President of the Cap Cana Board of Directors.
With the funds obtained through this bond issue, Cap Cana will pay in full its debt to the national banks, by making a payment of US $62.3 million. The remaining net funds will be used to speed up the project's development.

This is a pioneering transaction in many ways. Cap Cana, along with financial consultant and bond issue manager, Bear, Stearns & Co., developed an innovative financing structure with a level of complexity and sophistication never seen before in international markets.

The structure provides investors with an important level of protection by integrating a dynamic system of guarantees, which adjust as the construction project moves forward. It provides Cap Cana an extraordinary level of flexibility that will enable it to drastically increase its levels of sales, provide better payment plans for customers, and significantly increase the project's development speed.

The transaction's main innovation is the effective combination of securitization processes with project financing. There is an important construction component, which enables the creation of an attractive structure for both the investors and the company.

Funds from the bond issue will be deposited in an escrow account and will be disbursed for construction purposes, under de supervision of international firm The Louis Berger Group Inc., which will act as an independent engineering company.

"The quality of construction at Cap Cana is at par with the highest international standards," said Carlos Marcenaro, Senior Vice-President of The Louis Berger Group Inc. Interest generated by this transaction, as evidenced by a high demand of more than $100 million US dollars, enabled an increase in the bond issue from US $200 million to US $250 million, as well as a reduction in the interest rate to unprecedented levels for a Dominican corporate issuer.

This significant success, along with the innovative financial engineering, has spurred rumors around international financial circles that it may be nominated Transaction of the Year in Latin America.

CB Richard Ellis, the largest international real estate services company in the world, rated the Cap Cana property at US $1.11 billion. Jorge Hurtado, Director at CB Richard Ellis, pointed out that "Cap Cana is a development that stands out because of its ambitious dimensions; the combination of beaches, golf and a marina, and the indisputable beauty of its surroundings.
The project's distinctiveness, along with the prices it has achieved, reflects an impressive proposition of added value equal to the top destinations in the Caribbean." Given this high value, even after this bond issue, Cap Cana's debt levels will remain relatively low, since its total debt represents less than 30% of the project's worth.

Following its high-profile track of partnering with some of the most prestigious firms around the world, Cap Cana resorted to Bear, Stearns & Co. Inc. as the exclusive agent for the bond issue; and to Simpson, Thacher & Bartlett and Mejia, Armenteros & Ortiz, as legal counsel in the United States and the Dominican Republic, respectively. In turn, Bear Stearns secured the legal services of Thacher Profit Wood in the United States, and those of Squire Sanders Dempsey Pena Prieto & Gamundi in the Dominican Republic. KPMG Dominican Republic audited the company's financial statements, validating the data contained in the Offer Memorandum.
"We feel highly honored to have the opportunity to be part of a financial milestone in Dominican history," said Jose N. Cardona, Executive Partner at KPMG.
 

aegap

Silver
Mar 19, 2005
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How It All Wend Down: Cap Cana completes largest corporate bond issue in DR history

Valued at US $250 Million in 7-Year Bonds at 9.62%, this transaction is considered to be the largest issue by a private corporation in the country.

Monday November 13, 7:05 pm ET

Santo Domingo.? Cap Cana has just completed the largest international corporate bond issue in the history of the Dominican Republic, at the lowest interest rate ever for a Dominican company in the international arena.

The company issued $250 million US dollars in 7-year bonds at a rate of 9.62%. This is the first time that a Dominican company is financed in the international market at a rate below 10.87%.

In addition, Cap Cana is the only corporate issuer from the Dominican Republic to receive an international B rating by risk assessor Fitch Ratings, making it the highest ranking ever granted to company from this country.

Likewise, Moody's Investors Services gave it an international rating of B3. The success and low cost of the bond issue reflect the perception of reduced risk among foreign investors, the confidence inspired by its executives and the country's robustness for the development of world-class projects such as Cap Cana.

"We are very pleased to see Cap Cana, one of the companies in our consortium, issue bonds worth $250 million US dollars, this demonstrates its unequivocal business drive and its already well-deserved prediction as a successful project, which can only be compared to some of the most select destinations in the world," declared Abraham Hazoury, President of Grupo Abrisa.

"With this new boost of fresh capital, Cap Cana ensures it will continue on its accelerated rhythm of growth and will certainly fully achieve its goals," pointed out Ricardo Hazoury, President of the Cap Cana Board of Directors.
With the funds obtained through this bond issue, Cap Cana will pay in full its debt to the national banks, by making a payment of US $62.3 million. The remaining net funds will be used to speed up the project's development.

This is a pioneering transaction in many ways. Cap Cana, along with financial consultant and bond issue manager, Bear, Stearns & Co., developed an innovative financing structure with a level of complexity and sophistication never seen before in international markets.

The structure provides investors with an important level of protection by integrating a dynamic system of guarantees, which adjust as the construction project moves forward. It provides Cap Cana an extraordinary level of flexibility that will enable it to drastically increase its levels of sales, provide better payment plans for customers, and significantly increase the project's development speed.

The transaction's main innovation is the effective combination of securitization processes with project financing. There is an important construction component, which enables the creation of an attractive structure for both the investors and the company.

Funds from the bond issue will be deposited in an escrow account and will be disbursed for construction purposes, under de supervision of international firm The Louis Berger Group Inc., which will act as an independent engineering company.

"The quality of construction at Cap Cana is at par with the highest international standards," said Carlos Marcenaro, Senior Vice-President of The Louis Berger Group Inc. Interest generated by this transaction, as evidenced by a high demand of more than $100 million US dollars, enabled an increase in the bond issue from US $200 million to US $250 million, as well as a reduction in the interest rate to unprecedented levels for a Dominican corporate issuer.

This significant success, along with the innovative financial engineering, has spurred rumors around international financial circles that it may be nominated Transaction of the Year in Latin America.

CB Richard Ellis, the largest international real estate services company in the world, rated the Cap Cana property at US $1.11 billion. Jorge Hurtado, Director at CB Richard Ellis, pointed out that "Cap Cana is a development that stands out because of its ambitious dimensions; the combination of beaches, golf and a marina, and the indisputable beauty of its surroundings.
The project's distinctiveness, along with the prices it has achieved, reflects an impressive proposition of added value equal to the top destinations in the Caribbean." Given this high value, even after this bond issue, Cap Cana's debt levels will remain relatively low, since its total debt represents less than 30% of the project's worth.

Following its high-profile track of partnering with some of the most prestigious firms around the world, Cap Cana resorted to Bear, Stearns & Co. Inc. as the exclusive agent for the bond issue; and to Simpson, Thacher & Bartlett and Mejia, Armenteros & Ortiz, as legal counsel in the United States and the Dominican Republic, respectively. In turn, Bear Stearns secured the legal services of Thacher Profit Wood in the United States, and those of Squire Sanders Dempsey Pena Prieto & Gamundi in the Dominican Republic. KPMG Dominican Republic audited the company's financial statements, validating the data contained in the Offer Memorandum.
"We feel highly honored to have the opportunity to be part of a financial milestone in Dominican history," said Jose N. Cardona, Executive Partner at KPMG.
 
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aegap

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Mar 19, 2005
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Market Economy

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Cervecer?a Nacional Dominicana (CND), the markers of Cerveza Presidente, announced its intention to issue debt in the fund of Global Bonds (see details below as sourced from Bloomberg). This will be the 5th corporate issuer from the DR that come to market in the last year and half. This is very positive for the development of a corporate credit curve for future borrowers. CND stated that a portion of the bonds may be issued locally in DR. +ive news.

Here are the details from Bloomberg:
Dominican-based brewer Cerveceria Nacional Dominicana (CND) is planning a
USD270m 7-year (NC4) bond. Guarantors: Cervcer?a Bohemia & Presidente
USA & certain future subsidiaries. 144a/RegS. New York law. Issue rated
B1/B. A roadshow takes place in London today (12 Mar), before travelling to
Boston, the West Coast, and NY during the week. Pricing expected w/c 19 Mar.Lead Citigroup. Co-mans Standard Bank, Unicredit, WestLB.

Note: This is my personal opinion, an should not constitute investment advice. E-mail me at my personal address if you want to develop a dialogue.
 

Market Economy

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Of note, there has been a healthy debt issuance in Caribbean credits so far in 2007. Three cases come to mind:

First, Digicel, a holding company of Irish billionaire Denis O'brien, sold US$ 1.4 billion of senior fixed-rate bonds due in 2015.

Second, The Government of Jamaica issued US$ 350 million of bonds maturing in 2039 with an 8% coupon rate yielding 346 basis points above comparable UST.

Third, The Government of Belize, in a context of a debt restructuring issued US$ 545 million worth of bonds maturing in 2029.

And this list exclude issues that may have been done in local capital markets
Note: the source of this information is Bloomberg, L.P.


Note: This is my personal opinion, an should not constitute investment advice. E-mail me at my personal address if you want to develop a dialogue.
 

aegap

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Mar 19, 2005
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ch to Rate Cap Cana's $500MM Sr Secured Notes 'B-'; Affirms $250MM Sr Secured at 'B'

Fitch Ratings has affirmed the 'B' Rating on Cap Cana, S.A.'s $250 million senior secured notes. In addition, Fitch has assigned a preliminary rating of 'B-' to the expected issuance of $500 million in additional senior secured notes. Fitch's affirmation on the existing $250 million notes contemplates a change to the terms of certain covenants in the indenture relating to the incurrence of additional debt.

also reflects the expected increase in Cap Cana's leverage after the proposed $500 million issuance of additional senior secured notes. Cap Cana's principal activity is the development, construction, operation and administration of a tourist and leisure resort community project in the Dominican Republic. When fully developed, the project will be anchored by six championship golf courses (of which three are Jack Nicklaus Signature courses), the largest inland marina in the Caribbean, several luxury hotels, more than 10,000 housing units, and numerous sports facilities, along with high-end stores, restaurants, spas, and entertainment complexes.
To date, Cap Cana has experienced tremendous success in terms of sales of real estate properties and construction within the project. Accumulated investment in the project is now over $340 million and total sales revenue amounts to over $1 billion.
Cap Cana's first golf course, Punta Espada, commenced operations this past year and is scheduled to host a PGA Champions Tour Event in 2008. Cap Cana has also signed a licensing agreement with Trump Marks Real Estate LLC to brand sales of certain real estate properties. Trump-branded sales of Farallon cliff-side lots proceeded to total approximately $289 million in one day. Additionally, Cap Cana has signed a licensing and management agreement with the Ritz-Carlton Hotel Company for the management of a hotel expected to begin construction in 2008 and begin operating in 2010. Recently, Cap Cana has hired Parsons International, one of the largest management, construction, and engineering companies in the world as Project Manager.
A material security package backs the notes in the event of a corporate default. Both the $250 million issuance and the proposed $500 million issuance will be secured by a first-priority mortgage over unencumbered real estate property, as well as receivables related to the sale of individual property units. The specific real estate that will give rise to receivables is clearly defined and completely separated between the two issuances:
--First-mortgage liens on land equal to a minimum of 200% of the outstanding debt secures the $250 million issuance. The proposed new issuance will be backed 150% by first-mortgage liens.
--Receivables arising from the sale of real estate properties will equal 125% of the outstanding debt from the $250 million issuance. The notes expected to be issued will be backed by 120% in receivables.
Currently, the $250 million issuance is fully collateralized with approximately $350 million in eligible receivables under Trustee control. Phase I products that could give rise to eligible receivables to collateralize the $250 million issuance are nearly fully sold out. Delivery on many of these units will begin in early 2008, with this issuance expected to be fully collateralized by post-construction receivables by the end of 2008.
Phase II products, which will give rise to eligible receivables backing the proposed issuance, include: sales at the Trump Condo Hotel, condominium units at Las Iguanas, which will be adjacent to a new Jack Nicklaus Signature course of the same name, and certain residences within the Green Village development that were not part of Phase I.
The structure backing these issuances adds significant investor protections in two forms:
--Cash flow controls that will reduce project execution risks.
--Bond proceeds sized to the remaining construction costs will be held in escrow and only released upon the achievement of construction milestones. Additionally, a 6-month debt service reserve will be fully funded from proceeds.
Major risks considered in the ratings of the two issuances by Cap Cana remain two-fold. First, sales of Future units must be realized in order to collateralize the transaction and generate additional working capital and general liquidity for the project. Second, construction on individual units must be completed. Fitch believes these risks to be consistent with the expected 'B-' rating on the new issuance and the current 'B' rating on the outstanding notes. The ratings differential is explained by significantly different sales and construction risk profiles between the issuances and a loosening of the collateralization requirements for the new issuance. Independent engineer reports were used to facilitate modeling assumptions, which incorporated downside analysis regarding real estate valuations as well as construction costs.
Fitch currently has a 'B' Long Term Issuer Default Rating (IDR) for the Dominican Republic with a Positive Outlook.
For more detailed information on Cap Cana, see the new issue report titled 'Cap Cana S.A.' dated Nov. 3, 2006, available on the Fitch web site at Fitch Ratings.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, Fitch Ratings. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.





Fitch Ratings
Sam Fox, 312-606-2307 (Chicago)
Mark Salgado, 312-368-2080 (Chicago)
Christopher Kimble, 212-908-0226 (Media Relations,
New York)
 

aegap

Silver
Mar 19, 2005
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LLoyd's of London:

Dominican Republic's Cap Cana $500 Million Bond Guidance At 11.75%


Wednesday November 7th, 2007 / 17h21
espaceur.gif

NEW YORK -(Dow Jones)- The Dominican Republic's Cap Cana tourism resort has set price guidance of 11.75% per year for its planned issuance of $500 million in 10-year amortizing bonds, according to a term sheet provided by a fund manager.
A roadshow that has toured Asia, Europe and the U.S. ends Wednesday and pricing is expected later this week, it said.
The amortizing bonds carry a weighted average life of 8.5 years and will be sold via Deutsche Bank and Morgan Stanley.
The Cap Cana resort, located next to Punta Cana international airport, covers an area twice the size of Manhattan. According to the company's Web site, the projected total investment is $1.5 billion.
Moody's Investors Service assigned a speculative-grade B3 rating to the issuance, one notch below the B2 rating for the firm's existing $250 million of senior debt. Fitch Ratings has a single-B rating on the existing bonds and has assigned a preliminary rating of single-B-minus to the new bonds.
In October 2006, Cap Cana sold $250 million in seven-year bonds to yield 9.625%. The issuance was raised from its original plans of $200 million amid an order book that swelled to $1.1 billion.
The new bonds are backed by parcels of raw land rather than the "already-sold and partially-built product which backs the existing...notes," said Moody's analyst Philip Kibel in a recent statement. The new notes also have a lower collateralization compared to the older notes, he said in the statement.
Moody's rates the Dominican Republic's government at B2, with a stable outlook, while Fitch has it at an equivalent single-B, with a positive outlook.
The stable rating outlook on Cap Cana "reflects Moody's expectation that Cap Cana will maintain its conservative approach to leverage and stable earnings, while at least meeting its sales projections," Moody's said.
The bonds are unlikely to be upgraded "in the intermediate term," it said, adding that debt would have to remain at current levels while sales would have to outpace forecasts by 30% to warrant an upward move.
"A downgrade would reflect economic difficulties in the Dominican Republic, a natural disaster or other event that delays or damages the development, or sales demand for Cap Cana's housing and related property being less than anticipated by at least 10%," Moody's said.
Proceeds will be used to fund debt service reserve account, fund an escrow account and fund a debt repayment account, as well as fund a working capital reserve account, the term sheet said.
-By Matthew Cowley, Dow Jones Newswires; 201 938 5692; matthew.cowley@dowjones.com

Dominican Republic's Cap Cana $500 Million Bond Guidance At 11.75%
 

Lambada

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Are these the same as the ones which were pulled?

Beach Resort Bonds Wipe Out

'Rough market conditions have claimed two more LatAm high-yield bond victims. Cap Cana?s $500m 2017 amortizer was pulled, while Newland International opted to wait for a better window with its bond. Guidance had been issued at 11.75% are on the B minus/B3 Cap Cana resort deal via Morgan Stanley and Deutsche Bank, which looks unlikely to resurface any time soon. Newland International Properties, the builder of the Trump Ocean Club in Panama, is meanwhile postponing at least until this week a $220m 2014 NC3 bond issue, talked at 9.375%-9.625%, by Bear Stearns. The mid-year financials in Cap Cana?s documents are set to go stale next week, likely requiring a bit more turnaround time if the transaction is to be revived this year, says a banker familiar with the trade. Newland is understood to use September numbers and be better positioned to revive quickly should the markets turn around, says a banker on that deal.'
Latin Finance ? Current balance, income and financial ratios for Latin American banks
 

aegap

Silver
Mar 19, 2005
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Bloomberg.com: Bonds Cap Cana
Cap Cana SA, the developer of a luxury resort on the eastern tip of the Dominican Republic, and Energy and Industrial Utilities Company LLC, a unit of Detroit-based DTE Energy Co., canceled offerings of as much as $775 million ...
..

``I just don't see buyers for almost any corporate debt and we even saw people reluctant to buy some sovereign paper, a situation that's particularly rare,'' said Dario Pedrajo, who manages about $100 million in emerging market debt for Kapax Investment Advisors in Miami.
 

pabloncho

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Cap Cana Bonds

Does anyone know the current yield of Cap Cana's bonds? Where can I find such information? Does anyone have a ticker or something?
Thanks to all