S&P has cut the national-scale rating of Mexico’s Coppel to mxA minus, from mxAA minus. The donwngrade was triggered by the retailer’s aggressive expansion plans. They include opening new stores, Coppel’s acquisition of Hipotecaria Credito y Casa and the opening of the Banco Afore Coppel, which has seen leverage increase. The issuer had been on credit watch since November, and its outlook is stable.
Yearly Archives: 2008
Posted inDaily Brief
Bovespa-BM&F Plot Regional Consolidation
The Bovepa and the BM&F, which yesterday announced a merger of equals, seek to become an even bigger LatAm exchange by alliance or acquisition. A new holding company, provisionally called Bolsa Nova, will house the Bovespa and BM&F brands and is expected to have a market cap close to $20bn, making it the second largest exchange in the Americas. Bolsa Nova’s subsidiaries will cover the full range of tradable assets available in LatAm including currencies, commodities, derivatives, fixed income, equity and equity derivatives. The merged exchange seeks to establish a new role as a trade forum serving more than just Brazil. “The idea is to create regional consolidator,” says Marco Goncalves, head of M&A for Brazil at Credit Suisse, which advised Bovespa on the union. The new entity will look to set up specific agreements or make outright acquisitions of other exchanges in the region. One of the most obvious candidates is Mexico’s Bolsa, with which the Bovespa was previously in talks to set up a trading agreement for local investors to buy and settle offshore. The BM&F has also expressed an interest in a linkup with Argentina’s Bolsa de Comercio de Rosario, which trades commodities. Rothschild advised the BM&F on the transaction.
Posted inDaily Brief
Market Cheers Brazil Exchange Marriage
Shares in the Bovespa and the BM&F surged on news of their merger Wednesday. Investors showed enthusiasm for the expected synergies and a strong growth outlook for both entities. “The BM&F has grown at higher rates than similar exchanges in other markets while the Bovespa’s growth has been not only higher than that seen in other countries, but at comparable levels to the growth rates of derivatives exchanges,” says Gilberto Mifano, the Bovespa’s CEO. A new holding company, provisionally called Bolsa Nova, will buy all the shares in both exchanges and issue new ones that will result in a 50-50 ownership. Bovespa holders will also get a cash payout of BRL1.24bn reais to adjust for the different shares outstanding in each company. Itau estimates goodwill of BRL16.4bn, which can be amortized over 6 years. The deal still needs to be approved by the CVM, the Central Bank, Brazil’s antitrust regulator and each side’s board and shareholders. A shareholder vote is expected for the week of April 7, say company officials, with a full conclusion to the voting process taking place by the end of April. A share swap, however, will only be done once a union is agreed.
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Colombia PE Infrastructure Fund Takes Shape
A new infrastructure fund being set up by Julio Torres, Colombia’s former head of public credit, and other executives, is heard gaining traction among local investors. “Our target is between $100m and $150m,” Torres tells LatinFinance, adding he’s been approaching local pension funds and family offices for commitments. Full funding is expected by July and resources are to be deployed quickly, says Torres. Diligo, as the advisory shop is called, has partnered up with Nexus, a local asset manager, to form the ND Latin America Infrastructure Fund I. An advisory board for Diligo has also been established, which counts as its members Isaac Yanovich, former president of Ecopetrol; Luis Ernesto Mejia, former minster of energy and mines under Uribe; Maria Isabel Patino – a former infrastructure official for the city of Bogota – and Peter Grossich, an investment banker and principal at Nexus.
Posted inDaily Brief
Mexico Buys Fixed Income Dips
Mexico’s finance ministry has retired ahead of schedule $714m from 10 global bond series, with maturities ranging from 2009 to 2034. The move is part of its aim to reduce net foreign debt by $500m this year. The various transactions took place in “the last few weeks” and were financed with local market debt issuance and loans from international financial institutions, says Hacienda. “The volatility that has prevailed in the international markets during the last few weeks represented an opportunity to buy back specific off-the-run global bonds,” it says. The ministry notes that the 10 issues were considered among the more illiquid, and that it wished to decrease their importance on the yield curve relative to benchmark bonds.
Posted inDaily Brief
Mexican Highway up for Bid
Mexico’s government has announced a MXP4.5bn highway project to connect the southern city of Oaxaca to the coastal resort towns of Huatulco and Puerto Escondido. The 283km road will finance the project with a combination of public and private investment from the new MXP270bn National Infrastructure Fund. A bidding guide will circulate next month, the government says, with a winner to be chosen by the end of the year. The government aims to have the highway completed by 2010. It expects about $2bn will be spent on 14 projects in 2008, and launched in February the Pacific Package, a follow up to last year’s highly successful FARAC toll road auction, which incorporates some existing roads and greenfield projects. The second round of FARAC toll roads will be auctioned in June, according to a banker whose shop hopes to bid.
Posted inDaily Brief
Brazil’s Klabin Segall to Sell Local Debt
Klabin Segall’s board has approved the sale BRL220m in 2013 debentures. The Brazilian real estate developer has not set a date for the transaction. The domestic debt pipeline is rebuilding, with Telemar Participacoes seeking approval for BRL1.4bn.
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PDVSA and Petrobras in Refining Venture
An oil refining joint venture between PDVSA and Petrobras is to be discussed today at a Chavez-Lula meeting in Recife, according to the Venezuelan ministry of information, which cites Pernambuco’s governor Eduardo Campos. The new company would operate the $4.5bn Jose Inacio Abreu e Lima refinery, built by PDVSA and Petrobras in Recife, and a petrochemicals facility to be erected nearby.
Posted inDaily Brief
Klabin Announces Temporary CFO
Sergio Alfano will take over from Ronald Seckleman as CFO of Brazilian paper manufacturer Klabin on April 1, says a company official. The announcement follows the appointment of Reinoldo Poernbacher as CEO. However, the company says the changes are temporary and possible outside candidates may be brought into both senior positions. “We view these (temporary) changes as positive as the company has suffered from the perception of lackluster management and with its aggressive expansion program, in better hands, the stock could finally come into its own,” says Bradesco in a research note.
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JPMorgan Wins Peru Securities Contract
JPMorgan has won a contract to provide securities services to Cavali, Peru’s central securities depository. The shop will provide custody and asset administration services to Cavali for its portfolio of global securities. JPM also provides this service to Cedeval, El Salvador’s central securities deposit. “We are expanding region to region among all different types of clients; not only central depositories but we have central banks, insurance companies, pension funds, mutual funds,” says Fabian Banchiero, product segment head for LatAm at JPMorgan Securities Company.