Brazil’s AutoBan, a toll road operator owned by Companhia de Concessoes Rodoviarias (CCR) is planning a BRL950m ($470m) debenture sale, it says. The issue qualifies as an “infrastructure bond,” or a local bond offering tax advantages to investors, due to its use of proceeds. If AutoBan is able to price, it could be the first, though fellow road operator Rota das Bandeiras is also preparing a similar bond. AutoBan plans a BRL850m tranche and a BRL100m tranche, both due 2017, with the smaller said to be separated for foreign issuers. The deal is able to be upsized to as much as BRL1.28bn. Banco do Brasil and HSBC are managing. The deal is not yet rated.
Yearly Archives: 2012
Posted inDaily Brief
Colombia Cuts Rates
Colombia’s central bank has chosen to lower the benchmark interest rate by 25bp to 4.75%, its second straight 25bp cut. The decision was unanimous, according to Citi. “We expect the CB to continue easing its monetary policy stance going forward, as the economy will continue cooling down throughout the rest of the year,” the shop says, calling for 50bp more in cuts this year.
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Costa Rica OK to Issue
Costa Rica’s congress has given its second and final vote in favor of issuing $4bn in bonds over a 10-year period, with a maximum of $1bn per year. In what would be its first international bond since 2004, the Baa3/BB+/BB+ sovereign is expected to kick start an RFP process ahead of issuing a benchmark size 10-year. “We expect the new bond to be issued in approximately two months; the law establishes a series of time-consuming procedures that need to be completed before the new bonds can be issued,” Nomura says in a report. Costa Rica is turning to the dollar market to tap low interest rates and ease pressure on local currency financing.
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Eletrobras Defines Domestic Jumbo
Brazil’s Eletrobras has given additional details of its planned issue of BRL2bn ($990m) in the domestic bond market, ahead of a late October pricing. It plans inflation-linked bonds divided into a 2018 tranche paying up to 6.0%, and a 2022 tranche paying up to 6.3%, according to a prospectus. The exact amount and interest rate for each will be determined during the pricing period, expected in late October. Investor presentations are scheduled to begin September 24. The proceeds are to be used for the electric company’s investment needs, and are part of a BRL4.5bn fundraising plan. BTG Pactual and Santander are managing the sale, which has not ben assigned a rating.
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EM Debt Takes in Funds
EM debt funds booked net inflows of $426m during the week ended August 22, according to EPFR. In terms of performance, the class was up 0.63% for the week ended August 23, for a year-to-date gain of 11.69%, according to Lipper. Global income funds gained 0.73% during the week, and are up 5.56% ytd. International income funds rose 1.16% during the week, for a 4.87% gain ytd.
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IB Fee Pool Seen Stable: Bankers
Investment banking revenue is down from one year ago, but not so much that catching 2011’s total fee haul is impossible. With fees charged for deals relatively stable from last year, bankers say volumes will be more of a driver for their revenue than anything, and diversification away from Brazil is becoming more and more important. A strong September and October in DCM and ECM would help the picture the most. “The only fee base that came down [this year] was ECM,” Guilherme Paes, head of investment banking at BTG Pactual, tells LatinFinance. DCM fees are the same, he says, and M&A fees are stable and still attractive. At $1.04bn through August 24, the regional revenue total from M&A, loans, ECM and DCM is down versus the $1.38bn in corresponding period in 2011, according to Dealogic. BTG led the overall league tables in the region through August 24, with $114m, or 10.9% of the total pool. The bank was also at the top of the M&A table, with $75m, and the ECM table, with $26m. In ECM, fees have been affected by a greater number of banks per transaction, as well as many deals not resulting in full fees due to lower-than-expected pricing. In lean times, local markets can also help. “DCM and M&A markets continue to be much better than last year due to the fees coming from local markets. The local markets are very strong, and always open,” Paes says. Issuance and M&A activity, and the accompanying revenues, should still be dictated by global economic conditions, and news from the US and Europe. While Brazil still accounts for most of the region’s business, bankers stress the need to diversify revenue streams away from Brazil and into growing markets including Peru, Chile, Colombia and Mexico. “The revenue base is more affected by Brazil. LatAm ex-Brazil is probably flat, but given the size of Brazil, the overall level is down,” Javier Vargas, Co-Head of Investment Banking for Latin America at Credit Suisse, tells LatinFinance. “Investors are a bit more careful about Braz
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Investor Unloads Cruz Blanca Stake
LatAm focused investor Linzor Capital has sold a CLP46.47bn ($97m) stake, or about 15%, of Chilean healthcare provider Cruz Blanca Salud, Cruz Blanca says. The 92m shares priced at CLP505 each. Celfin managed. Linzor sold a 6% stake in Cruz Blanca earlier this year.
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La Polar Set for Share Subscription
Chile’s La Polar has received final approval for an equity sale targeting CLP120bn ($249m), it says. The retailer will start meeting local investors next week as it looks to raise 750m new shares as part of an agreement with creditors following the disclosure of heavy losses last year. Participating shareholders have until Tuesday to register their intent, with the subscription period opening September 3. The price of the subscription will be equal to the average price of the three days prior to subscription minus a 5% discount, with a minimum of CLP160. Shares closed at CLP218 Friday. The retailer set aside nearly $1bn-equivalent in loan loss provisions last year amid accusations of fraud after the company arbitrarily overcharged its credit clients and is undergoing the increase as part of a $900m restructuring with creditors. Creditors recently granted an extension to October 29 to complete the equity sale. Celfin is managing the capital raise, and Lazard is the advisor on the restructuring.
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Mexican Radio Closes Loan
Mexican broadcasting company Grupo Radio Centro (GRC) has closed a $90m senior secured term loan, according to people familiar with the process. The facility includes a $52m 5-year and $38m 7-year tranche each offered in USD and pesos. The 5-year tranche pays Libor+575bp, or TIIE+525bp for those choosing pesos. The 7-year, meanwhile, pays Libor+675bp, or TIIE+625bp. Proceeds will be used to finance GRC’s acquisition of US-based KXOS-FM from MS Communications. Credit Suisse led the transaction, which was being offered at $10m and $20m. Actinver, Bancomext, HSBC and Monex participated.
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New Finance Minister Tapped following Echeverry Surprise
Colombian president Juan Manuel Santos has named Mauricio Cardenas as the country’s new finance minister after the resignation of Juan Carlos Echeverry. The well-respected Echeverry was a surprise late inclusion to Santos’ cabinet reshuffling last week. “This announcement came as a surprise as the only movements expected by local political analysts were related to the ministries of agriculture, environment, transportation and interior. Although this announcement took us by surprise, we believe Mr. Cardenas is a suitable and adequate candidate for this job,” Citi says in a report. The shop notes that the change does not affect the positive trend and results displayed in the fiscal front over the last years, which include a series of key reforms passed on Echeverry’s watch. Lately, he had started to oppose directions in monetary policy, Itau says, calling for greater intervention in the foreign exchange market. In the last two weeks, the finance ministry itself started to buy dollars, in parallel to the central bank’s $20m-a-day program. Cardenas had been the energy and mining minister, and has also served as transport minister. “His arrival suggests an easing of the strife between the finance ministry and the central bank, putting the latter again at the helm of exchange rate policy,” Itau says.