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Infighting at BNDES; PagSeguro prices follow-on offer

* A clash among the executives of state-owned development bank Banco Nacional de Desenvolvimento Econômico e Social has thrown a wrench into the government's plan to sell about 120 billion reais worth of assets, three people with knowledge of the matter told Reuters. BNDES Director Andre Laloni recently asked for a temporary leave after bank staffers objected to the sale of BNDES-managed stakes through follow-on offerings and blocked his attempt to change internal rules on such sales. It is unclear if Laloni will come back to BNDES or if the government will change the rules in line with his recommendations, the sources said.

* PagSeguro Digital Ltd. priced a follow-on public offering of class A common shares at US$39.00 apiece, representing an aggregate offering amount of about US$653.3 million. Parent company Universo Online S/A, the only selling shareholder in the offering, is offloading 16,750,000 PagSeguro shares.


* A ruling against seven financial institutions regarding alleged monopolistic practices in the Mexican government bond market would be negative for their credit profiles, Moody's said. Mexican antitrust regulator Cofece has reportedly notified some banks that it discovered probable evidence of efforts to manipulate government bond prices in 2017. Meanwhile, experts interviewed by El Financiero say the ruling could lead to fines of up to 100 billion Mexican pesos and imply hefty losses to state finances.

* Ricardo Monreal, the Senate leader of Mexico's ruling Morena party, said the legislature aims to approve an initial series of bills regulating financial services fees by the end of October, Reuters reported. The package of bills, which would amend 32 articles and three laws, would move to the lower house if passed by the Senate.

* Mexico's Finance Ministry swapped 41.12 billion pesos in 2020 and 2021 debt for bonds maturing between 2023 and 2050 in an operation aimed at improving the government's short-term maturity profile, El Financiero reported.

* Costa Rican President Carlos Alvarado signed a plan on Oct. 15 that would allow heavily indebted people to access a "rescue" loan from state-run Banco de Costa Rica and Banco Nacional de Costa Rica, El Financiero reported. Both banks said they were analyzing the details of the debt restructuring plan.

* Former Costa Rican Finance Minister Alberto Dent has been appointed president of the Conassif financial regulator for the next two years, El Financiero reported. He replaces Luis Carlos Delgado Murillo.

* The Costa Rican government has presented a bill that envisions the central bank setting a so-called usury rate to cap consumer lending rates, as well as allowing banks to tap a wider range of financing sources, El Financiero reported.


* Lázaro de Mello Brandão, the chairman of Banco Bradesco SA's holding companies, died Oct. 16 at the age of 93. Brandão is a former CEO and chairman of the Brazilian bank.

* Moody's upgraded Caixa Econômica Federal's stand-alone baseline credit assessment and adjusted baseline credit assessment to "ba3" from "b1," reflecting the bank's improved capitalization and profitability metrics. A reduction in the size of its balance sheet and a decline in loan originations helped Caixa ease pressures on capitalization. The bank also booked increasing profits in the past eight quarters.

* Brazil's Senate is expected to hold a second-round vote on the government's proposed pension reform bill in the week of Oct. 21, Reuters reported. Economy Minister Paulo Guedes has canceled a trip to Washington to attend the International Monetary Fund's annual meeting, deciding instead to focus on the government's economic agenda. Brazil's central bank chief and deputy economy minister for foreign trade will represent the country at the IMF meeting in place of Guedes.

* Brazilian financial technology firm EBANX Ltda. has become the latest such company to reach a market value of more than $1 billion after securing financing from U.S. fund FTV Capital, Folha de S. Paulo reported. The company offers payment solutions to international companies operating in Latin America.

* B3 SA - Brasil Bolsa Balcão has won a dispute at the Carf tax adjudication body linked to the merger of the Bovespa Holding SA and BM&F SA 11 years ago, Valor Econômico reported. Judges overturned a tax charge of 3.2 billion reais, and the Treasury plans to appeal the ruling.


* The board of Grupo Aval Acciones y Valores SA approved an ordinary bond program worth 400.00 billion Colombian pesos, equivalent to roughly US$116 million.

* Peru's strong fiscal position should allow the Andean country to maintain its A3 credit rating with a stable outlook until at least 2021, Jaime Reusche, Moody's vice president of sovereign risk, told SEMANAeconómica. He said that while public spending could accelerate, the country should meet its target for a fiscal deficit of 1.0% of GDP by 2021.


* Consumer activity in Argentina will suffer through 2020, with unemployment likely to keep rising as the country's economic contraction extends for a third year in a row, Moody's said. Following a 1.7% contraction in 2018, the rating agency expects total GDP to decline 3.8% in 2019 and 2.5% in 2020.

* Monthly inflation in Argentina hit 5.9% in September, a record-high for 2019, national statistics agency Indec said. The figure is up from 4.0% in August and 2.2% in July, with price increases during the 12 months through September suggest annual inflation of 53.5%.

* Argentine e-commerce platform MercadoLibre Inc. will invest north of 3 billion reais in Brazil in 2020 to improve logistics and financial services offerings, COO Stelleo Tolda told Bloomberg News. "We see opportunities not only in payments, but also in all financial services, including credit, investments and eventually insurance," Tolda said.

* Argentine government officials started a round of meetings with members of the International Monetary Fund's technical team in Washington D.C. on Oct. 16 to discuss payment of the country's standby loan and economic prospects days before the presidential election, Clarín reported. Alongside senior Finance Ministry officials, Central Bank President Guido Sandleris is also expected to join the meetings.

* Argentina's central bank exceeded its target for limiting growth of the monetary base in the first half of October, El Cronista reported, citing the latest data from the entity. The central bank eased its "zero emission" target last month, allowing a 2.5% increase in the issuance of pesos in September and October.

* Chile's lower house has given initial approval to a bill that would ban credit or debit card promotions giving users of the cards exclusive discounts on products or services, Diario Financiero reported. The bill will now pass on to the Senate.


* An easing cycle from central banks has the potential to encourage further risk-taking from investors, which may threaten the stability of the global financial system, the International Monetary Fund warned. Bank profits are expected to drop due to flatter yield curves, negative yields in some countries and a more tepid global growth outlook, the IMF said, adding that banks outside the U.S. could also face U.S. dollar liquidity strains.

* Global securitization issuance is on track to surpass US$1 trillion in 2019 despite a recorded softness in the Chinese market in the third quarter, S&P Global Ratings said. Latin America's securitization market slightly improved as total new issuance rose to US$11 billion in the first three quarters of the year from US$7 billion in the prior-year period.


* Asia-Pacific: China loosens interbank bond rules; Macquarie faces lawsuit in Germany

* Middle East & Africa: Afreximbank confirms $250M London IPO; Qatar Islamic Bank's Q3 profit up YOY

* North America: Morgan Stanley Q3 EPS up YOY; Highland Capital Management files for bankruptcy

Helen Popper contributed to this article.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.

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