In the week ended January 5, LatAm equity funds had inflows of $707m, making it their best week since October, says EPFR Global. Investors sought exposure to Brazil’s commodities and the possibility that new president Dilma Rousseff will tackle some long-running structural issues. In the same week, flows into Brazil equity funds hit a 13-week high of $676m. However, Mexico equity funds, one of the few fund groups to set outflow records in 2010, suffered further redemptions worth $71m. Meanwhile, EM equity funds saw inflows of $3.3bn, kicking off the New Year with their best week, in flow terms, since mid-November, EPFR says. LatAm equity funds, however, saw performance deteriorate, losing 0.51% in the week ended January 6, according to Lipper. EM equities were up 0.77% and global small and mid-caps were up 0.21%.
Yearly Archives: 2011
EM Bond Inflows Continue
EM bond funds took in a net $385m in the week ended January 5, says EPFR Global. Performance was also positive, up 0.49% in the first week of the year, according to Lipper. Meanwhile, global income funds were down 0.17% and international income funds dropped 1.04%.
Transelec Eyes UF Bonds
Chilean power transmission company Transelec plans to issue UF6.5m ($282m) to refinance debt maturing in April, says a company spokeswoman. The A+ rated notes will be issued in 2 tranches, one for 10 years and the other for 30. Corpbanca and Scotia are leading the sale.
Unirenta Arrendamientos to Sell Bonds
Unirenta Arrendamientos, a Mexican leasing company, will look to raise up to MXP200m January 20, according to a regulatory filing. The bonds will have a maturity of 3.5 years and pay a spread over TIIE. The bonds are rated AAA on a national scale by HR Ratings.
Tecnisa Sets Equity FO Date
Brazilian real estate developer Tecnisa has set February 2 as the pricing date for its equity follow-on, according to regulatory documents. Tecnisa plans to begin roadshowing January 19, and estimates its sale of 36m primary shares will bring in BRL387m, based on the December 27 BRL10.74 per share reference price given in its filing. Tecnisa shares have gained since, closing Friday at BRL11.30. A 15% greenshoe and 20% hot issue will also be available. Tecnisa is selling shares in order to increase its liquidity and raise funds for growth. It plans to spend half of the proceeds on land acquisition, 35% on construction costs, 10% on debt repayments and 5% on working capital. Itau is lead manager and bookrunner, with BTG Pactual, Credit Suisse, and Santander as bookrunners. Elsewhere in the sector, Brazilian homebuilder Direcional Engenharia and broker Brasil Brokers have also each indicated plans for a follow-on offering.
Infraero IPO Reported Possible
Brazil’s government is considering the sale of shares in the Infraero airport authority, according to Bloomberg, which cites remarks by defense minister Nelson Jobim in a local radio interview. The idea of floating a stake in the regulator has been considered for years – with bankers imagining high investor interest – but has likely gained new urgency as government officials worry about funds for needed air infrastructure improvements ahead of the 2014 World Cup and 2016 Olympic Games. With the government seeking to expand air travel services, such a sale would serve to meet investor demand for equity plays on the growth of Brazil’s infrastructure and middle class purchasing power, says an ECM banker. Infraero manages 67 airports in the country, accounting for nearly all air traffic. There are 16 terminal projects directly linked to the World Cup and Olympics which will receive an estimated BRL4.6bn in investment, Infraero has said.
Codelco Readies E-CL Float
Codelco’s board has given the green light to begin the public sale of its shares in power company E-CL. The state-owned Chilean copper miner plans to float the 40% of the company it owns on the local market and in the US, a plan which had been among the options it had been considering for the asset since the middle of last year. A 3-week roadshow is set to begin Monday that will include meetings in the local, US, and other markets, according to a banker on the deal. Codelco hired LarrainVial and JPMorgan, which have been advising it on strategic alternatives, as coordinators. Santander is co-manager. Analysts have estimated the stake would be worth about $1.1bn. Codelco co-owns E-CL with France’s GDF Suez, which holds a 52.4% stake, in addition to a 7.6% free float. Though GDF Suez has shown interest in buying Codelco’s position, the banker on the deal says they do not have any preferential right in the divesture. Proceeds of the sale are expected to be used to fund the copper miner’s investment plans. E-CL shares closed Friday at CLP1,221. Chile’s government has been considering the sale of E-CL and some of its other large assets as it maps out funding for earthquake reconstruction costs. It has said multiple times that a sale of part of Codelco itself is off the table.
Banco de Chile Closing Asia Syndication
Banco de Chile is expected to close syndication on a $150m 3-year loan by January 14, with signing expected by the end of the month, according to bankers with knowledge of the transaction. The loan is being marketed only to Asian investors, after bank meetings took place in Taiwan in December. Standard Chartered and Wells Fargo are joint leads. Bankers away from the deal expect pricing at 110bp over Libor, which one banker says is attractive pricing for the borrower.
Cencosud Mulls Global CLP
Chilean retailer Cencosud, which is roadshowing a likely dollar bond, is also heard considering adding global CLP to the mix. The retailer, scheduled to wrap up the “non-deal” US, European and LatAm meetings Tuesday, is heard looking to do a 10-year bond for up to $1bn and may also add a CLP tranche, according to investors following the process. Investors estimate a dollar debut from Baa3/BBB minus Cencosud to come in the neighborhood of UST plus 225bp-275bp. Direct comps are difficult, though some point to the most recent triple B Chilean pure corporate, paper maker Arauco (Baa2/BBB/BBB+), which got a 5.115% yield, or UST plus 245bp in September on a $400m 10-year. Arauco now trades at UST plus 155bp, according to a trader, who notes a good part of the tightening is owed to UST movement. Chile’s largest retailer benefits from strong business and geographic diversification and focus on the defensive food retail sector, Moody’s notes. Investors weigh such positives against an ambitious 2011 expansion plan, high leverage, and risk associated with about 30% of its business in Argentina. Deutsche Bank, JPMorgan and Santander are managing the investor meetings. Also in the pipe for this week are BRMalls, seeking a NC5 perpetual through BTG and Deutsche, and Banco do Brasil, aiming to place a new euro-denominated bond. Both are scheduled to start roadshows today. Brazil’s Banco Cruzeiro do Sul is also expected to initiate the sale process for a senior 5-year bond as soon as this week.
The Canada-Latin America Breakfast Meeting 2011
The Canada-Latin America Breakfast Meeting, co-hosted by Calgary Economic Development (CED) and LatinFinance will be held on March 26, 2011, at the Calgary Chamber of Commerce Calgary, Canada, on the occasion of the Annual Meetings of the Inter-American Development Bank (IDB).