(Bloomberg) Billionaire Denis O’Brien’s telecoms company, Digicel Group Ltd., is edging toward an accord with some investors to push out a share of its debt after months of negotiations, according to a person familiar with the talks.

The company is offering new secured bonds maturing in 2022 in exchange for $2 billion of unsecured notes originally due in September 2020 and may announce at least a portion of its investors have taken up of the offer as soon as Tuesday, said the person who asked not to be named as the information is not yet public.

Digicel Sweetens Bond Exchange Offer Following Creditor Pushback

Bondholders balked at elements of an exchange plan outlined by Digicel in August and quickly organized to push for better terms. This month, Digicel extended the deadline for take up of the offer to December 18 and sweetened the terms. The company has been reviewing options to tackle debt used to turn the mobile-phone carrier into a global operation, with customers spread from El Salvador to Vanuatu.

If the offer is not completely taken up tomorrow, Digicel may offer a further deadline extension for the remaining investors, the person said. The company’s September 2020 bond yields 35 percent, up from about 21 percent in July.

Digicel is also negotiating a separate bond swap involving debt currently due in 2022. The deadline for bondholders to accept an offer in respect of those bonds remains at December 21. The company declined to comment.

Deal Tweaks

The debt exchange offer now prohibits payments to Denis O’Brien or any entity he controls in connection with it, according to a Covenant Review report. It also restricts the ability to transfer funds to equity until the 2022 credit agreement has been repaid in full, and sets conditions for asset sale proceeds to be used to repay the agreement. The revised debt exchange also restricts the ability of the company to incur new debt secured by the equity of Digicel, Covenant Review said.

One thing that is keeping the pressure on global stock benchmarks is the plunge in oil prices.

West Texas Crude futures have dropped more than 8% in the last three sessions, with a barrel for January delivery falling as low as $47.84 this morning. Brent crude is at the lowest level since October 2017.

The sell-off is being driven by worries over increasing U.S. shale supplies, doubts over how effective the implementation of the latest OPEC+ cuts will be, and weak sentiment as global equities fall.

Source: Bloomberg

Mexican President Andres Manuel Lopez Obrador (AMLO) on Saturday sent Congress his 2019 budget plan, which includes more spending on social programs and infrastructure, while still preserving the fiscal framework established by his predecessors.

His administration expects this year’s surplus to be about 0.8%. The new administration also announced it will boost Pemex 2019 budget to US$23bln, which is 14% increase from 2018 with a focus on already producing fields in shallow waters and onshore to reduce risks.

AMLO has long promised to pay for increased spending on pensions, education, and infrastructure by a cost-cutting campaign that many investors suspect is unfeasible.

AMLO roiled markets even before taking office by canceling a partially-built Mexico City airport, sending the peso, stocks, and bonds tumbling.

Source: Bloomberg

According to Fitch, Puerto Rico will see a continued recovery in economic activity as federal reconstruction funds stimulate domestic demand.

However, structural headwinds will undermine growth as federal aid fades in the years ahead unless significant reforms are made.

Fitch forecasts real GNP growth of 5.9% in Fiscal Year 2019 (FY19; July 2018 – June 2019), from an estimated 9.1% contraction in FY18. This is an upgrade from their previous forecast of 4.8%, as the recovery in economic data has been stronger than they anticipated. 

Source: Fitch

Barita Investments Limited (BIL) has advised that their Board of Directors met on December 13, 2018, and has approved a Non-Renounceable Rights Issue of 258,064,516 ordinary shares to BIL’s Ordinary Stockholders.

The share ratio allocation for the issue will be Ten (10) additional shares for every seventeen (17) shares owned by existing BIL ordinary stockholder on record as at December 31 2018. The transaction opens on January 8, 2019 and has an offer price of $15.50 per share which is less than half the current trading price.

The offer closes on January 22, 2019 for acceptance by existing shareholders and has a final close date of January 25, 2019 for acceptance by applicants excess shares (not taken up by allotees)

Source: JSE

In line with the Bank of Jamaica's expectations, the local consumer price index (CPI) decelerated during the month of November.  The 12-month CPI  Inflation which is the primary variable tracked by the BOJ under its Inflation targeting regime was 4.1%  for November,  down 60bps when compared with the outcome (4.7%) for October.  At this level, the inflation result remains within the BOJ's target range of 4% to 6%. There was no growth (0.0% movement) in the CPI for the month of November.  

According to STATIN, this outcome was influenced by a 0.3 percent increase in the index for the division ‘Food and Non-Alcoholic Beverages’. This was as a result of higher prices for vegetables, starchy foods, and fruits. However, this increase was tempered by a 0.8 percent decline in the division ‘Housing, Water, Electricity, Gas and Other Fuels’ due mainly to reduced rates for electricity despite the increased rates for water and sewage. Additionally, the ‘Transport’ division also declined by 0.7 percent as a result of a decrease in the price of petrol.

The BOJ in its recent Short-Term Inflation Analysis and Forecast report indicated that it is expecting inflation to remain within its target range for fiscal 2018/19.   It also indicated that risks to its projections are fairly balanced for the next four quarters. 

IMF releases a statement on Jamaica following staff visit to the island.

• Buoyancy in tax revenue supporting more capital spending, helping economic activity and living standards
• “Public debt is expected to fall below 100 percent of GDP by the end of this fiscal year, for the first time since FY2000/01”
• The unemployment rate is at an all-time low of 8.4%
• Inflation within the central bank target of 4%-6%
• Economic growth forecast at 1.5%-2% for fiscal year

Source: Bloomberg

(SGJ’s Financials)  For the financial year ended October 31, 2018, SGJ reported a net profit of $12.77Bn (EPS: $4.10), representing an increase of 3% over the $12.41Bn (EPS: $3.91) reported a year prior. This performance was attributed to strong growth in its loan portfolio and increased revenue flow from foreign exchange activities coupled with improved expense management. SGJ’s main priority for the current financial year is restructuring its operations to focus on its core business lines to achieve greater operational efficiency and customer satisfaction. The Company’s Board of Directors approved a dividend $0.51/share payable on January 18, 2019, to stockholders on record as at December 27, 2018.

(JBG’s Financials)  For the six months ended October 2018, JBG Reported net profit attributable to shareholders of $629.32Mn (EPS: $0.61) representing a slight (-0.66%) decline relative to the $633. (EPS: $52.82) reported one year prior. This outcome was primarily influenced by increases operating, finance and tax expenses, despite the Group experiencing revenue growth across all its operating segments except Haiti.

(Barbados Today) This was the sentiment expressed by the Government’s Economic Advisor Dr. Kevin Greenridge during an address to the Society of Trust and Estate Practitioners (STEP) on Wednesday. This comes on the heels of the Barbados Central Bank receiving its $200Mn check from the IDB, which pushed the country’s reserves above $1Bn for the first time since the Barbados Economic Recovery and Transformation (BERT) programme was set in motion. After reaching a staff-level agreement with the International Monetary Fund (IMF) in early September, and approval of an extended fund facility of about US$290 million in October, the island received pledges from other international lending agencies ($150Mn from the Caribbean Development Bank and $200Mn form the IDB). This puts the country in a much better position relative to the  $577.1Mn (7 weeks of import) reported in September of this year.  This is also a significant improvement over its all-time low of about $410Mn (6.6 weeks) reported last December.