Following a timid and fruitless attempt to tap an unwelcoming bond market earlier this year, Brazilian mid-sized bank BicBanco has launched the sale of 2010 dollar-denominated bonds, with the intention of placing $100m at a coupon of 7%. The exact amount and pricing will be known once the books are closed, which should be by the end of the week, international manager Paulo Celso tells LatinFinance. Celso expects mostly US and European buyers. Proceeds will fund the bank’s working capital. Banco do Brasil and Banco Votorantim are managing the sale. BicBanco went on a roadshow in January, but put off a deal due to market volatility. UBS was accompanying it for that tour. It follows Banco Fibra, BMG and Banco Cruzeiro do Sul, who have tapped the dollar bond market with short-dated notes to meet capital needs. BicBanco also syndicated a $110m trade-related loan in February at Libor plus 110bp for 1-year and Libor plus 145bp at the 2-year tenor.
Yearly Archives: 2008
JBS Plans Beefy Rights Offering
Brazilian meat producer JBS has approved a capital increase through a rights offering worth BRL2.55bn. The world’s largest beef exporter plans to sell existing shareholders 360.7m shares at BRL7.07 each, to raise total capital to BRL4.5bn. Proceeds will finance part of the company’s recent $1.9bn US and Australia acquisitions. Existing shareholders will be given priority, in a subscription period lasting until May 13. Separately, JEF Participacoes, the holding company that controls JBS has received approval from the government to operate a bank. JBS Banco will help finance JBS’ suppliers, a spokeswoman tells LatinFinance, but is not directly operated by JBS.
Liquidity Still an Issue for Equity
Three issuers hope to follow in the footsteps of Hypermarcas next week. Of the trio, retailer Les Lis Blanc appears particularly vulnerable due to the limited size of its planned IPO, say investors and bankers away from the deal. The company is looking to raise $170m by offering 30m shares at BRL10.50-BRL12.50, plus a greenshoe, via Merrill Lynch and Morgan Stanley. “Low liquidity gets in the way,” says one investor eyeing the ECM pipeline. Educational company Anhanguera Educacional is looking to boost its float by offering 19.5m shares at a presumably small discount to its trading level. Dealogic estimates the offering at around $315m equivalent based on a BRL27.50 trading price prior to announcement. Credit Suisse, Merrill Lynch and Santander have joint books. One issuer that will surely not face liquidity scrutiny is Grupo Gerdau, whose Gerdau SA and Metalurgica Gerdau will offer a combined $2bn worth of new stock April 24. Itau BBA and JPMorgan have books on the global and local offerings. Of the total, $770m will be issued by Metalurgica Gerdau, with the rest coming from Gerdau SA. The company is financing the next stage of its expansion in Brazil and abroad.
Issuers Reopen Equity Market with $3bn Push
Encouraged by hints that a financing window may finally be creaking open in LatAm, five Brazilian companies will try to place up to $3bn in new equity over the next eight sessions. The ECM pipeline has been dormant for most of the year, but in the past days issuers have committed to pricing ranges and issue dates. “The market is not easy right now, but it is certainly not closed,” says an ECM banker with deals on the way. Issuers in general have until the end of April to tap the markets using December 31 numbers, which partly explains the upcoming glut. Markets have also calmed though they still offer limited long term visibility. “It’s really more the perception that markets have improved,” Will Landers, a portfolio manager for LatAm at BlackRock, tells LatinFinance. “Intraday volatility is still very high,” adds Landers, noting he is not convinced that all of the companies in the pipeline will succeed at their desired valuations. Hypermarcas is first up, hoping to price an IPO tomorrow at BRL20.50-BRL24.50 to raise the equivalent of $533m, including a greenshoe, according to Dealogic. If successful, the offering would be the first IPO of the year of substantial size, and could open the door for dozens of borrowers waiting in the wings. Citi and Merrill have books.
Cumbre de PPP en México
El seminario es diseñado para permitir a funcionarios del sector público, financieros, inversionistas, concesionarios y operarios, EPCs, los financieros y monolines a entrar en arriba al análisis del minuto de las peculiaridades de este segmento que sigue creciendo y evolucionando rápidamente, y las oportunidades del financiamiento y la inversión que presenta.
Hipotecaria MXP Debt Set for This Week
Mortgage lender Hipotecaria Su Casita is preparing up to MXP2bn in 2033 RMBS denominated in the UDI inflation-linked unit. About 10% of the bonds will be in a subordinated tranche. The senior tranche could price at 150bp-160bp over the UDIbono, according to bankers on the deal. The AAA rated transaction is set to price Wednesday and managed by Santander and HSBC. Separately, ING Hipotecaria plans to sell MXP750m in 2011 floating-rate bonds the same day. The transaction is expected to price at around TIIE plus 40bp-50bp. Proceeds will repay maturing debt. Santander is managing that sale.
LatAm Equity Funds Make Decent Return
LatAm equity funds returned 1.28% in the week ended April 10, according to Lipper. China region funds sank 0.46%, while EM funds rose 1.26%. The biggest gains were made by gold oriented funds with 2.08%, while Japanese funds dropped the most, with a loss of 3.11%. LatAm outperformed the world equity funds group, which overall sank 0.30%. They are up 3.11% year-to-date.
LatAm, Brazil Equity Funds See Inflows
LatAm equity funds took $182.8m in new funds in the week ended April 9, according to EPFR Global. Brazil equity funds also received $42.4m, raising total assets under management for that country by 3.1% to $13.7bn. The positive performance was echoed more broadly in EM, with GEM equity funds posting their best week in 2008 following two consecutive positive weeks. “Our daily fund flows data indicated something of an inflection point for emerging markets funds during the last week of March and a clear one for Europe equity funds on April 2,” says EPFR MD Brad Durham. EMEA equity funds, however, were negative for the fourth time in the past five weeks on concerns of current account deficits in places like Turkey, South Africa and Eastern Europe.
Mexican Miner Takes IPO to London
Penoles, the Mexican mining giant, plans to carve out its precious metals unit, to be called Fresnillo, and list it on the London Stock Exchange. The total offering, slated for May, is estimated at roughly $2bn and will include $900m worth of primary shares, say executives close to the process. JPMorgan Cazenove is the lead on what the issuer says will create the world’s largest primary silver producer. The decision to list in London is an unfortunate one for LatAm exchanges like the Mexican Bolsa, or the Bovespa-BM&F, which would have benefited from such a high profile and sizable deal. The latter has made no secret of plans to consolidate LatAm liquidity on a single platform. “The decision to list in London was made a while ago, and based on the fact that other big mining names such as BHP Billiton, Rio Tinto and Anglo American are listed there,” says a banker familiar with the deal. Peru’s Hochschild Mining listed itself on the LSE in 2006, also via JPMorgan. The deal is timed to coincide with record highs for gold and silver, the company’s main metals. “They’re carving it out to realize untapped value in the company,” says a banker close to process. He notes that within Penoles, the operation has a lower multiple than it would on a standalone basis. Citi, Canacord Adams and UBS will be co-managers on the equity deal. Peñoles intends to retain at least 75% of the ordinary shares of Fresnillo plc on completion of the offer.
Penoles Plots Debt Refi
Penoles, the Mexican mining giant, plans to restructure about $550m in long-term debt in order to better position its books for a spin off of Fresnillo. It aims to sell new debt in order to repay an 8.39% of 2012 structured silver payable notes issue and other senior unsecured debt. The IPO will result in significant cash in-flows to Penoles, which will also get MXP4.26bn from the precious metals business through a combination of a dividend and a capital reduction. Part of this may be distributed to Penoles’ shareholders depending on cashflow needs. CEO Jaime Lomelin, vp of mining and chemicals Manuel Luevanos, CFO Mario Arreguin, and vp of exploration David Giles will step down from their posts at Penoles and become CEO, COO, CFO and vp of exploration, respectively at Fresnillo, Penoles says. “Penoles will retain between 75% and 77.3% of the ordinary shares of Fresnillo plc depending on whether the over-allotment option is exercised or not. In doing so, Penoles expects to create value for its shareholders and personnel and for Mexico,” says the issuer. The other unit of the firm, Minas Penoles will focus on non-precious metals business. A listing without float will also be obtained on the Mexican Stock Exchange for Fresnillo. As of December 2007, Penoles says Fresnillo mines, development projects and exploration prospects had 291.1m tons of attributable mineral resources yielding 837.0m ounces of silver and 9.4m ounces of gold.