BBVA Paraguay is preparing a cross-border dollar bond, what would be the first from an issuer in that country. The bank is targeting a 10-year bond for about $200m, according to a report from Moody’s assigning a Ba3 rating. Such a bond would play to strong demand for high-yield credit and diversity, investors say, though success would depend on appropriate pricing and would be helped, ideally, by a guarantee from the parent. BBVA and Citi are heard managing the sale, with US and European investor meetings beginning Wednesday and finishing Tuesday. According to Dealogic, no dollar bonds have been issued by Paraguayan issuers. The IFC gave BBVA Paraguay a 4-year $30m loan last year to help it expand access to financing small and medium agribusiness entrepreneurs, the multilateral’s first long-term financing for a Paraguayan financial institution.
Yearly Archives: 2011
Brazil Bonuses Seen Outperforming
With bonuses now being paid, the expectation is that New York-based LatAm bankers may see compensation flat to lower, while counterparts in Brazil will get a bump. “If banks did well, bonuses in Brazil can be expected to be between 15% and 20% higher than in 2010,” says Vinicius Bolotnicki, Sao Paulo-based director at Options Group. BTG and Itau are expected to be among the most generous. “BTG has been heard as giving fair cash bonuses. Some who made partner level received good equity stakes,” adds Bolotnicki. Itau is heard paying 15%-20% more in bonuses than in 2010. However, despite a strong run for LatAm, with revenues significantly up, New York based bankers may be disappointed. “Rumor is that in the US, despite the LatAm teams being ahead of budget, compensation will not be great, as capital markets overall did not do well,” says a headhunter. He adds that New York salaries could be flat to 10%-15% lower than last year. Rossanna Figuera, CEO of The Talent Circle says the bonus pool has shrunk, with average bonuses down 20%-30%. “Most bonuses are flat to down from last year, but last year bankers were paid very well,” she says. Figuera adds that base salaries last year increased 2-3 times. Bonuses now make up about 60% of comp, down from as much as 90% a few years ago. “A lot of compensation is already in bankers’ pockets,” she adds. Sales and trading, and investment banking should be among the top earners, according to recruiters. Figuera expects around 30% of bonuses to be paid in stock and the rest cash. “It is not like a couple of years ago, when 50% was stock and there were deferred payments,” she adds.
The 3rd Latin America Mid-East Investors Forum (Abu Dhabi)
Building on the success of first two Latin America Mid-East Investors Forums held in Dubai and Abu Dhabi, LA-MEIF will bring together delegations of Latin America’s corporate and financial leaders with potential investors and business partners from across GCC and greater Middle East.
LatAm Equities Suffer Outflows
In the week ended January 19, investors pulled out $172m from LatAm equities, says EPFR Global. Inflation pressures in the region’s largest economy, Brazil, and China’s efforts to control its real estate and consumer prices raise questions about its appetite for the region’s exports. Brazil funds lost $93m while Mexico funds lost $4m. GEM funds, meanwhile, pulled in $1.2bn in flows as the belief that a stronger dollar would bolster demand from the world’s largest economy for EM exports, EPFR says. Lipper data shows negative performance as well for LatAm equities, which were down 2.05% in the week ended January 20 and down 2.59% year-to-date. Meanwhile, EM funds dropped 1.85% in the week and 1.30% ytd and global small and mid-cap funds dropped 1.86% in the week and 0.37% ytd.
EM Bonds Get Inflows
EM bond funds took in $144m in fresh money in the week ended January 19, with all of it going to funds with mandates for local currency denominated debt, says EPFR Global. However, performance suffered in the week ended January 20, according to Lipper, which says EM debt was down 0.74%. Year-to-date they have lost 0.28%. Meanwhile, global income funds lost 0.32% in the week and 0.28% year-to-date and international income funds lost 0.13% in the week and 0.73% ytd.
Mexico Holds Rate Steady
As expected, Mexico’s central bank held its policy rate steady Friday at 4.5% and left little in the statement to change analysts’ forecasts. Nomura says Mexico will continue to keep its rate at 4.5% throughout the year. “Monetary policy in neutral gear and there are no signs of a tightening cycle in the horizon,” says Goldman. Meanwhile, UBS says Mexico may begin hiking rates as early as October.
Correction: Banco Safra Prices Dollar Bond
A January 21 Daily Brief entitled “Banco Safra Prices Dollar Bond” incorrectly states the rating on a bond issue from Daycoval. It is rated BB.
SalfaCorp Announces Capital Raise
SalfaCorp has announced a CLP122.5bn ($249m) capital raise. The structure of the raise is to be decided at the Chilean construction and engineering firm’s next shareholder meeting.
Rentas Libra in Talks for Embonor Stake
Chilean holdco Rentas Libra is in talks to 45% of the voting rights, or about 232m shares, in Coca-Cola Embonor. Embonor, a local distributor of Coca-Cola and other beverages, is a subsidiary of Coca-Cola de Chile. The deal is valued at an estimated $923m equivalent including the assumption of debt, according to Dealogic. The acquisition would increase Rentas Libra’s stake in the company to 79%. For the 9 months to September 2010, Embonor reported CLP44.5bn in Ebitda, a 6.1% increase over the same period the previous year, according to company information. The companies were not available for comment.
BAML Advising Drummond on Sale
BAML is advising Drummond on the sale of its Colombian assets, according to a source familiar with the situation. The US-based mining company is heard to be talking with Xstrata, a Swiss commodities trader, according to a banker away from the deal. The assets could be worth $8bn, according to press reports.