Moody’s has put Brasil Telecom’s global scale senior unsecured rating of Ba1 under review for possible upgrade and affirmed its Aa1.br national scale senior unsecured rating (stable), based on its achievement of positive margins in the mobile telephony business, cost reduction efforts and maintenance of strong credit metrics. The review will focus on the sustainability of credit metrics in light of changes expected for the Brazilian telecommunications industry in the near to medium term, including the introduction of number portability and several changes in regulations to promote competitiveness. Trends in traffic, revenue and margins by product and the company’s financial policy going forward will also be considered.
Yearly Archives: 2008
Posted inDaily Brief
Banco de Bogota Readies COP Bonds
Banco de Bogota plans to sell COP200bn in April, CFO Maria Luisa Rojas tells LatinFinance. The notes rated AA+ on a local scale will have a maturity of 7-10 years. Proceeds are for working capital. In February, the bank’s president told local media to expect an issue of up to COP300bn. Banco de Bogota and Valores Bogota will manage the sale.
Posted inDaily Brief
Cemex Adds to April MXP Bond Pipeline
Mexican building materials provider Cemex plans to sell up to MXP3bn in peso-denominated bonds in April. The mxAA+ offering will include a 2018 fixed-rate tranche, and a 2010 tranche over 28-day TIIE. Cemex has not yet set the sale date or indentified use of proceeds. Santander is managing the sale. Cemex sold MXP2.5bn in 7 and 10-year UDI-denominated bonds in December via HSBC. Separately, ING Hipotecaria is heard preparing a RMBS issue of up to MXP1bn via Santander to price in April. Grupo Posadas’ MXP2.5bn sale in 2018 fixed and 2013 floating-rate notes via Credit Suisse is slated for April 1, and Infonavit is preparing to sell MXP3bn in 2030 MBS April 9 through Banamex and Deutsche. Telmex may also follow with a mixed issue of up to MXP3bn in AAA notes up to 20 years via Inbursa. Broadcaster Televisa has filed for an MXP7bn 4-year shelf.
Posted inDaily Brief
IDB Lends to Colombia for Public Services
The IDB has approved the first $50m tranche of a $200m credit line for second-tier financing for public service providers in Colombia. The main goals of the program are to facilitate longer maturities for eligible projects of public service providers, improve access to financing, in particular for small projects, and consolidate the role of government agency Findeter.
Posted inDaily Brief
Hypermarcas Sets IPO Target
Brazil’s Hypermarcas expects to raise BRL733.9m-BRL877m through a local IPO, based on a price range of BRL20.50-BRL24.50. The company’s 35.8m shares are set to begin trading April 18. Proceeds will fund new acquisitions, new product development, and working capital. Citi and Merrill Lynch are managing the operation, with UBS Pactual as co-manger. The owner of several brands of food, cleaning, hygiene and medication products had filed for an IPO last year, but pulled the plug when it opted to sell a 25% stake to a group of Mexican investors for $250m.
Posted inDaily Brief
Brazilian Insurer to Split Shares
Brazilian Insurance Provider Porto Seguro has approved a 2-for-1 share split. The split is effective March 29, and brings the total shares to 230.6m. Shares closed Friday at BRL53.20.
Posted inDaily Brief
Local Currency Bond Funds Gain
EM bond fund flows in Q1 were characterized by strong outflows from hard currency funds countered by inflows into local currency funds, according EPFR Global. “Flows in EM bond funds continued to be a tale of two currency groups,” observes the data tracker. EM domestic bond funds took in $2.4bn in the quarter, while euro, yen and dollar-denominated EM bond funds lost $1.8bn. By returns, EM funds gained 0.02% in the week ending March 27, according to Lipper. Global income funds and international income funds gained 0.09% and 0.47%, respectively. High yield funds had the strongest gain of the week with 0.92%, while target maturity funds experienced the week’s most significant loss at 2.13%.
Posted inDaily Brief
LatAm Equity Funds Gain
LatAm equity funds gained 3.92% during the week ended March 27, according to Lipper. EM funds rose 4.06% while China region funds gained 5.15%, close to the biggest riser of the week, natural resources, with 5.33%. Financial services equity funds had the most significant drop of the week with 1.96%, says Lipper. However, LatAm equity funds saw outflows $1.5bn in the first quarter, while Brazil equity funds lost $579m, according to EPFR Global. The drainage was more severe what was seen in the same quarter a year ago, during which the losses for LatAm and Brazil were $238m and $144m, respectively. The only EM region to actually see equity inflows in Q1 was EEMEA, which gained a thin $157m. In total all of EM lost $20bn in funds, which paled in comparison to the $69bn that flowed out of all developed markets. Meanwhile, money market funds absorbed $141bn in the quarter, demonstrating a strong flight to quality throughout the period.
Posted inDaily Brief
Voto Swoops in on Peru’s Milpo
Votorantim Metais Investimentos, a subsidiary of Brazilian commodities powerhouse Grupo Votorantim, has made an unsolicited $422m offer to purchase 20.9% of the shares in Peru’s Minera Milpo, which is traded on the Lima Bolsa. If successful, the bid for 26.2% of the outstanding shares will raise Voto’s stake in Milpo to 51%, according to an executive on the deal. Voto is offering $2.87 for each of the 147m shares it hopes to acquire in the next 20 business days. That is a 13% premium over Thursday’s closing price of PES7.00. Milpo, whose main metals are copper and zinc, will help Voto broaden its growing zinc operations and access a new source of copper. “Copper’s the stuff [Voto] can’t get in Brazil,” says Christopher Ecclestone, mining analyst at Hallgarten. JPMorgan advised Voto on the acquisition, while Milpo is understood to have had little involvement in the hostile bid, and did not hire a bank. “It will be interesting to see if there’s any pickup in resource nationalism as a result of this,” says Ecclestone, adding Chinese companies Chinalco and China Minmetals have recently picked off Peru Copper and Northern Peru Copper, which are listed in Canada.
Posted inDaily Brief
LatAm M&A Bucks Global Slump
LatAm M&A bankers may be crying over the demise of Vale-Xstrata – which could have added $90bn to the year’s volume – but they are doing much better than their peers in other markets. First quarter targeted volume was $25.86bn from 203 transactions, up 39% year-on-year in volume terms, according to preliminary data from Dealogic. This compares to a 40% decline in global M&A to $652.6bn in 1Q 2008, the lowest since Q1 2004 ($557.3bn). “While volume has decreased, deal count was up 4% from 1Q 2007 driven by deals between $100m and $1bn, now accounting for 40% of global volume, up 13 percentage points from Q1 2007,” says Dealogic. EM targeted M&A activity meanwhile rose 3% year-on-year, to $169.4bn. This was 34% less than in Q4 2007. EM volume was 26% of global M&A volume, up 11 percentage points from Q1 2007 and the highest start to a year on record. “Acquisitions by EM companies into developed markets accounted for 30% of total EM acquirer M&A volume ($50.2bn via 221 deals), up 86% from in Q1 2007 ($26.9bn via 127 deals),” says Dealogic.