The Caribbean Development Bank has priced a $175m 2-year FRN at Libor+30bp, coming with a smaller size and shorter tenor than initially expected. The borrower had been showing investors a $200m 5-year floating rate note. Some accounts simply did not like the floating rate structure and the L+30bp pricing. “It is just not very sexy at L+30bp with little or no prospects for a meaningful Fed rate increase over the next 2 years,” said one buyside analyst. The borrower had considered a fixed-rate issue but preferred floating rates to match its lending portfolio. BNP Paribas acted as lead.
Yearly Archives: 2011
Posted inDaily Brief
Celulosa Arauco Shuffles Leadership
Celulosa Arauco has named Cristian Infante as CEO. He was previously corporate management and development director, and the top job will be his fourth at the Chilean pulp and paper producer since joining in 1996. Infante replaces Matias Domeyko, who moves to the newly created role of executive vice president, responsible for areas including Arauco’s strategic planning and international expansion. Domeyko had been CEO since 2005, and had previously been CFO.
Posted inDaily Brief
Chile Holds Rates Steady
Chile’s central bank held its rate steady at 5.25% Thursday. The decision is the first pause for the bank in 6 months, having raised its rate at every meeting since January, with 475bp in cumulative hikes this cycle, according to Goldman Sachs. The shop still expects to see the rate reach as high as 6.00% by the end of the year. RBS cites favorable inflation data in June and ongoing concerns about weaker domestic demand in the second half of the year as motives for the pause.
Posted inDaily Brief
Ex-Steel CFO Joins Embraer
Embraer has picked Paulo Penido Marques as its new CFO effective Monday. Marques, most recently CFO at steelmaker CSN, replaces Cynthia Marcondes, who leaves Embraer to pursue personal projects. Prior to jobs at steelmakers CSN and Usiminas, Marques had worked at Cosipa, Citi and JPMorgan.
Posted inDaily Brief
Fitch Ups Uruguay to BB+
Fitch has upgraded Uruguay to BB+ from BB, revising its outlook to stable from positive. The sovereign’s improving creditworthiness is being driven by better fiscal solvency ratios, a stronger debt maturity structure and high GDP per capita income, the agency says. “Its five-year average growth increased to 6.2% in 2010, considerably higher than the ‘BB’ median over the same period. Reduced trade and financial links with Argentina make Uruguay less vulnerable to economic developments in its neighbor,” it adds. Fitch also estimates central government debt could fall to 44.1% of GDP in 2011 from 50.2% in 2008, which would put it above the ‘BB’ median.
Posted inDaily Brief
Gol Considers Bond
Brazilian airline Gol is using cash on hand to finance the recently agreed purchase of competitor Webject, but it could hit the USD bond markets to help pay for the transaction, CFO Leonardo Pereira tells LatinFinance. The tie-up should result in BRL100m in savings for the first two years following regulatory approval, he adds. Gol agreed this week to acquire fellow Brazilian low-cost airline Webjet for BRL311m ($197m), subject to approval and possible adjustments. The acquisition value consists of a BRL96m payment and the assumption of BRL215m in debt. Webjet has BRL81m in debt coming due this year, with another BRL34m in 2012. This comes on top Gol’s BRL146m of maturities in 2011 and BRL55m for 2012. Sao Paulo boutique Virgent Partners advised Gol on the transaction, while Citi advised Webjet.
Posted inDaily Brief
Interaguas Secures World Bank Loan
Brazil’s Federal Integrated Water Sector Project (Interaguas) will receive a $107.4m technical assistance loan from the World Bank. The project is being coordinated by the Brazilian ministries of environment, national integration and cities, and national water agency.
Posted inDaily Brief
Oi Plans Jumbo Local Bond
Brazilian telecom Oi plans to raise BRL1bn ($630m) through a new domestic bond issue by its Brazil Telecom unit. The rule 476 sale will carry guarantees from the company’s Telemar Norte Leste unit. A 2016 bond is paying the DI plus up to 1.10%. Santander is managing the sale. Brasil Telecom and Telemar Norte Leste are two of the Brazilian telecom’s many subsidiaries that were rolled this year into one opco and one holdco as part of a structural simplification plan.
Posted inDaily Brief
Province of BA Returns for Another $250m
The Province of Buenos Aires re-emerged Thursday with a cheap $250m retap of its 11.75% 2015 that moved the borrower’s underlying curve wider and made for a volatile day in the secondary markets, investors say. “They priced it to move but the whole curve suffers,” says an EM portfolio manager who passed on this issue but participated in the last retap. Before the announcement the bonds were being quoted at around 104.20 to yield 10.48%, only to fall to 103.00 or 10.83% after news of the retap emerged. According to one account, the bond dropped as low as 102.50 before recovering to around 103.00. Leads were heard whispering 11% before generating a $650m plus book and pricing at 102.854 to yield 10.875%, allow them to surpass the initial $200m target size. “It is hard to find credits that are so attractively priced. It was too cheap not to [participate]” says an EM portfolio manager who bought into the trade. The reopening brings the outstanding size to US$1.05bn. Ratings are B3/B on the 144A/RegS, New York law bond. Settlement is T+5, with maturity falling on October 5 2015. Bookrunners were BAML and Deutsche Bank. The same banks brought the province’s $250m retap of the 2015s in October last year and they also lead the original $550m deal in September 2010 when it was priced at 99.076 to yield 12%.
Posted inDaily Brief
Telmex Swaps CFOs
Adolfo Cerezo has retired from his position as CFO at Mexican telecom Telmex after 33 years with the company. From August 15, he will be replaced by Carlos Robles. With Telmex since 2005, Robles has been sub-director of budgets and financial evaluation.