Yearly Archives: 2012

BTG Pactual leads the region’s ECM league tables in terms of volume and fees, at the end of a down year after which bankers nonetheless expect a rebound in 2013. LatAm saw $23.78bn in total equity issuance volume through Thursday from 70 transactions, according to Dealogic data. This was down from 2011’s full-year total of $31.44bn from 79 deals, considered at the time a poor total. LatAm’s 2012 volume fits into $216.00bn done in the whole of EM, what should be a 9% drop from 2011’s total. BTG’s $2.76bn share puts it ahead of Citi ($2.29bn) and Bank of America Merrill Lynch ($2.18bn). The Brazilian bank has earned the most fees, $58m, followed by JPMorgan’s $42m and BAML’s $34m. The overall LatAm wallet stood at $401m, compared to 2011’s $611m. If for no other reason than things couldn’t get much worse, ECM bankers are optimistic that volumes and the pay they take home can increase in 2013. A boost from Brazil, which had an uncharacteristically weak year, should combine with continued activity in Mexico and the Andes to lift regional volume. “Brazil will come back,” says a New York-based ECM banker, noting there are enough high-quality issuers preparing deals liquid enough to invite foreign participation. At the same time, Mexico and the Andes should continue to improve and attract investors in the way they did this year. He highlights Santander Mexico’s IPO and the “re-IPO” of Fibra Uno as laying the groundwork for sustained issuance in Mexico going forward into 2013, which should see 5-10 IPOs. “The market has been characterized by excess demand for unfortunately too few issuances this year,” says an Americas ECM head of another bank. He notes the presence this year from many international investors who had not bought in the region before, which indicates interest – the banks just have to bring the right deals. Recognizable, liquid issuers would be a good start. Brazil already has the IPOs of Banco do Brasil’s BB Seguridade insurance unit on the way, and Mexico is

Peru’s Gas Natural de Lima and Callao (Calidda) has selected Citi and Santander for an international bond transaction, according to a filing on the Peruvian bolsa. Exact timing and further details have yet to be determined, but a source familiar with the gas distributor’s plans says issuance size could reach $320m. Majority shareholder Grupo Energia de Bogota (EEB) took over Calidda in 2011, after buying a 60% stake from Houston-based energy company Ashmore Energy International for $350m. EEB and Colombian gas transporter Transportadora de Gas Internacional (TGI) will be used as pricing reference points as the debut issuer looks to tap low international rates enjoyed by Latin American peers. In April 2010, Calidda received a $50m loan from the IFC to help provide gas connections to more than 45,000 households. The financing was part of a $135m package which also involved regional development bank Corporacion Andina de Fomento (CAF). The funding was sought to help Calidda expand capacity of its distribution network from 255m cubic feet to 420m cubic feet a day and support implementation of Calidda’s $200m four-year investment plans. Gas Natural de Lima is the holder of a 33-year concession granted by the Government of Peru to build and operated the gas distribution network in Lima and Callao.

Chile’s Saesa has issued UF2.5m ($120m) in 21-year bonds with a 10-year grace period in the domestic bond market. The electric transmission company priced the bonds at 97.85, with a 3.75% coupon of to yield 3.94%, or government bonds plus 125bp. The proceeds will be used to refinance debt. IMTrust and BCI managed the transaction, rated AA/AA on a national scale. Saesa sold UF2m in domestic bonds in its previous deal in October 2011.

In what is likely the final Mexican domestic bond deal of the year, Mexico’s Banco Compartamos has reopened its 2015 notes, adding MXP1.5bn ($117.5m) in a tightly priced and upsized sale. After receiving MXP1.7bn demand, and the microlender reopened at 101.80 and priced at a spread of TIIE+57bp, inside of TIIE+59bp price talk. The microlender originally targeted MXP1bn, but postponed issuance by one day to increase the size of the transaction. Investment funds and private banking were among the notable buyers, according to a person familiar with the sale. Proceeds will be used to refinance short-term indebtedness comprising of lines of credit. Banamex led the transaction, rated AAA/AA on a national scale. The original MXP1bn bond priced at TIIE+130bp in 2010.

After two years in the making Braskem Idesa has finally closed a $3.2bn loan package for its Etileno XXI project, what it calls the largest-ever project finance deal in the petrochemical sector. The deal is the first time the Mexican and Brazilian development banks have done a financing together and the first time Brazil’s BNDES has used its international line, according to people familiar with the matter. The package includes direct loans of 16.25 years from BNDES ($623m), Nafin ($280m), Bancomext ($120m) and Export Development Canada ($300m). The IFC and Interamerican Development Bank are each lending $285m directly for 16.25 years, and each arranged a $350m 14.25-year B loan that brought in MLAs SMBC, HSBC, Banco do Brasil, Bank of Tokyo Mitsubishi and KDB at $70m each per loan. Finally, Italy’s SACE is guaranteeing a $600m 16.25-year facility, with SMBC and HSBC coming in at $60m each, BBVA, Intesa Sanpaolo and Santander at $100m each and Mizuho at $30m. The company and lenders decline to disclose the interest rates involved. Intesa Sanpaolo is agent on the Sace Facility and SMBC was Braskem Idesa’s financial advisor. White & Case was both international and Mexican counsel. The proceeds will help fund the $4.5bn Etileno XXI ethylene and polyethylene plant in Nanchital, Veracruz, with the remainder coming from equity. The petrochemical complex, built by a joint venture between Braskem and Mexico’s Idesa, has been under construction since October 2011 and should be operational by 2015.

Eike Batista has put BRL509m ($250m) into OSX, the Brazilian shipbuilder says, by buying 12.9m shares through a put option. The transaction follows a similar one done in October and completes his commitment to put BRL500m in equity capital into OSX by March. There is an additional BRL500m to be put in by March 2014. Batista pays BRL39.38 per share, equal to OSX’s IPO price adjusted for inflation. OSX shares closed at BRL10.05 Thursday.

Natura Cosmeticos has agreed to acquire 65% of Australia’s Emeis Holdings for AUD68m ($65m).
The Brazilian cosmetic company plans to pay cash for the stake. Natura and Emeis, operator of the Aesop brand, will continue to operate independently. The transaction is subject to regulatory approvals, and is expected to close by the end of April.

A BNDES bridge loan of BRL2.2bn ($1.1bn) will help state-controlled oil producer Petrobras build a new fertilizer plant in Mato Grosso do Sul. The plant is expected to come online in September 2014. Further details of the loan’s terms were not available. Earlier this week, Petrobras agreed to buy 100% of the Araucaria Nitrogenados fertilizer plant, located in the state of Parana, from Vale for $234m.The state-controlled oil producer will pay the miner using the revenues from the leasing of mining rights owned by Petrobras to Vale.

S&P has raised the credit rating of Corporacion Andina de Fomento (CAF) to AA minus from A+. “The ratings reflect our assessment of the bank’s strong business profile and very strong financial profile,” it says. The agency credits CAF’s repeated success in raising paid-in capital with one-time and often early payments from an increasingly expanded membership base. Currently, the supranational has 10 full member shareholder countries and 9 associate member shareholder countries. Enrique Garcia, CAF’s chief executive, says in a statement that the new recognition amid the global economic crisis is an endorsement of the financial management of the institution. S&P also highlights CAF’s strong financial profile reflected in its capital adequacy, funding and liquidity as reasons for the upgrade. CAF has issued approximately $17bn during the 1993-2012, it says, of which $2.8bn was raised from diverse debt markets in 2012. The outlook is stable. CAF is now rated AA minus/AA minus/A+.

Pedro Delgado has resigned as head of Ecuador’s central bank, after it was revelaed he had used a falsified university degree earlier in his career. “We verified that Pedro Delgado had presented a false diploma to INCAE. He has done a great harm to the revolution,” President Rafael Correa says via Twitter. A replacement had not immediately been named.