Yearly Archives: 2011

In yet another facet of Brazil’s growing global recognition, banks are pitching corporates DCM issuance in South Africa. The idea is still limited to the few issuers with substantial assets in Africa. But South Africa-based Standard Bank and Barclays, owner of a majority stake in South Africa’s Absa, have the local presence and LatAm relationships needed to originate such deals, bankers say. Bankers at both institutions say rand-denominated issuance is indeed a possibility for such issuers. “There have been some discussions,” says one banker. “South Africa has some capital controls, which means there is some trapped capital within South Africa,” Ruth Mazzoni, corporate debt analyst at Standard Bank tells LatinFinance. “It tends to be the same South African corporates issuing over and over again, so investors might be interested in some diversification,” she adds. Mazzoni also says that cash raised in South Africa could be used in the rest of Africa without capital controls or major restrictions. She explains that diversification would be the main advantage for issuers. However, an unfavorable turn in exchange rates could quash any plans. She notes the Brazilian beef companies could be candidates along with Vale, Petrobras and Odebrecht. JBS and Marfrig have operations on the continent. Given development banks’ general interest in funding in diverse currencies, Mazzoni adds that rand issuance might also be interesting to BNDES, especially if it establishes a benchmark curve for other borrowers. Finance officials at Petrobras and Vale do not respond to requests for comment on the subject, and Odebrecht CFO Paulo Cesena tells LatinFinance his company is not considering African issuance at this time. Vale, Petrobras and Odebrecht each count several African countries among their worldwide operations, most notably South Africa and in lusophone and natural resource-rich Angola and Mozambique. In 2010 through December 21, non-government credits issued more than $4bn equival