How is debt handled for tracking stocks? Are they borrowed and guaranteed under the Liberty Global parent as EURO currencies?
I am trying to figure out how the debt issue will be impacted by hyper inflation. Usually if they borrow the local currency and there is hyper inflation and they are able to pass the costs to clients, the real debt is actually decreasing quickly.
Hyper inflation will be followed by contagion and sovereign defaults. We have been to this movie before. Doesn't this bother you more?
http://www.tradingeconomics.com/chile/government-debt-to-gdpThe debt to gdp ratio seems very low to me.
http://www.reuters.com/article/2014/12/04/chile-bonds-finmin-idUSL2N0TN1YS20141204"Dec 3 (Reuters) - Chile raised $2 billion via a double bond placement on Wednesday, which Finance Minister Alberto Arenas said was the country's biggest sovereign issue since it returned to democracy and international debt markets in 1990."
Seems like it was blocked from international debt market since 1990. Therefore most of its current government debt is local. Therefore inflation actually helps more than hurt.
I think there is a possibility to have the classic boom-bust cycle. They just got access to international debt market. They can borrow money to boost their economy. Then GDP grows, making the debt to GDP ratio low. Therefore they can borrow more...... Eventually the cycle will go into the other direction, but right now since they just got international debt access, it should be in the early stages of the boom bust cycle.
Another question for all of you who likes LILA, could you please let me know why you think LILA is cheap?
"Giving pro forma effect to the OCF impact of the Choice transaction, the LiLAC Group ended Q2 2015 with adjusted gross and net leverage ratios of 3.9x and 3.5x, respectively. These ratios take into account the impact of a cross-currency derivative that synthetically swaps VTR Finance B.V.'s $1.4 billion debt into CLP 760.3 billion."
What does this mean? Does this mean they hedged the currency risk for their debt?