Brazil’s LLX has finalized details on the BRL750m ($371m) 2027 bond done at its LLX Acu unit. The superport complex in Rio de Janeiro is to pay 6.09% interest on the inflation linked notes, according to Anbima. The debenture amortizes in annual installments beginning in 2015. Caixa is managing the sale, done under the rule 476 restricted format, and purchasing it. The proceeds will help fund construction. Controller Eike Batista last week shelved plans to buy up LLX’s outstanding shares and delist them.
Yearly Archives: 2012
Posted inDaily Brief
Mexican Gets Loan
Mexican industrial group Cydsa has signed a $50m 5-year loan, it says. The credit from Rabobank is done at its Valores Quimicos subsidiary and raises funds for an electric cogeneration project. It does not disclose the interest rates and officials do not respond to a request for comment.
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Mexican Specialist Plans CCD
Mexican investment shop Grupo Axis is preparing a transaction of up to MXP6.5bn ($508m) in Mexico’s certificado de capital de desarrollo (CCD) market, according to regulatory filings. The specialist investment bank and asset manager is preparing a fund that may make equity or credit investments across a broad group of setors. As has quickly become the trend in the CCD market following regulatory changes last year, the total amount should be reached through a series of capital calls. The documents do not detail the return structure, though the issuer says is targeting a return of more than 20%. Banamex is managing the sale. Founded in 1990, Axis has made investments in and done transactions for sectors including energy and telecommunications.
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Moody’s Negative on Argentina
Moody’s has lowered the outlook on Argentina’s B3 rating to negative from stable, it says. The rating agency cites a “haphazard” policy environment, concerns about official reporting of GDP, inflation and other data, and the sovereign’s lack of resolution to debt arrears with the Paris Club. “The combination of unreliable economic statistics, continued underpayment of debt obligations, and lack of resolution of debt arrears one decade after the original default represent conditions that are unique among B-rated sovereigns and denote underlying credit risks,” Moody’s says. If the country’s main economic and debt metrics are affected these problems, the agency would consider a downgrade. S&P lowered the outlook in its B rating to negative in April. Following a meeting with the government, the IMF “regretted the lack of sufficient progress” Argentina has made regarding the quality of its inflation and GDP growth statistics, and may consider additional steps after further review, the IMF says. The reprimand was well short of what the fund was expected to do as far as punishing Argentina, Nomura says in a report.
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Safra Tightens Grip on Swiss Bank
Safra is set to control 90.47% percent of Swiss private bank Sarasin following an offer to minority shareholders, it says. The bank has also extended the offer to October 5 in the hope of getting additional acceptance. Safra bought a controlling stake in the Swiss private bank from Dutch cooperative Rabobank last year.
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UK Security Firm Adds in Brazil
UK-based security specialist G4S has agreed to acquire 100% of security provider Vanguarda Seguranca e Vigilancia, it says. The deal, for which the value is not disclosed, is done through G$S’ SSE DO Brasil unit and purchased from the founders. Vanguarda provides security personnel, security systems and monitoring services and mobile patrols to key strategic sectors such as banking, transportation, commercial buildings, education, health and public services, and Interativa provides unarmed security and facilities services. The pair’s combined revenue is approximately GBP165m ($266m), and G4S notes that the combined consideration for Interativa and Vanguarda was in line with the group’s “normal” multiple of 8x-10x the companies’ current year Pbita. Brazil is estimated to be the fourth largest security market in the world, and is expected to grow by approximately 10.5% per year, with a forecast market size of $16.6bn in 2019, G4S says. The company was not available for additional comment.
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BTG Hits the Road
BTG Pactual plans to meet fixed-income investors this week in Europe and the US, testing the market for dollar-denominated issuance at the same time the bank is separately considering Colombian peso-denominated debt. The Brazilian bank’s roadshow, officially non-deal, begins in London and Boston on Wednesday, followed by New York and Los Angeles Thursday. BTG last visited the bond market last year, pricing a $500m 2016 bond which was trading to yield at 3.75% as of Monday, according to traders. Bradesco, BTG Pactual, Citi and Deutsche Bank are managing the process. The bank was also rated last week for 5-year COP-denominated bonds. BTG, Celfin Capital and Deutsche are handling that process, which could result in the first COP-denominated deal for a Brazilian issuer.
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CFE Nears MXP Sale
CFE is planning to issue up to MXP17bn ($1.3bn) in Mexico’s domestic bond market on Thursday. The expected pricing date was originally Wednesday. The 30-year fixed-rate transaction has a 15-year average life, according to market participants. The proceeds will be used to finance expenses related to the La Yesca hydroelectric power project. Banamex, BBVA Bancomer and Santander are managing the transaction, rated AAA on a national scale.
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Pine Plots LF Offering
Brazil’s Banco Pine is preparing to issue BRL300m ($148m) in letras financieras (LF) in Brazil’s domestic debt market, it says. The issue comes under a BRL1bn program. It does not offer information regarding the timng of the sale, which awaits regulatory approval. BTG Pactual, Santander and Pine Investimentos are managing the sale. Pine is rated A+ on a national scale. The bank is also considering the sale of bonds in Chile’s domestic market, having met with investors and registered a UF6m ($282m) program of up to 10 years with JPMorgan and Celfin.
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Rule Change Seen Benefitting Mid-Size Banks
Measures announced by Brazil’s Central Bank lowering banks’ reserve requirements should benefit the country’s mid-sized banks, Barclays says. “In our view, this decision was taken by BCB to primarily make sure liquidity conditions remain intact for smaller banks post the announcement of the liquidation of Cruzeiro do Sul,” the shop says. The Central Bank is incentivizing Brazil’s large-cap banks to use funds freed up under the changes to direct resources to either buy loan portfolios or Letras Financeiras from smaller banks. SME-focused mid-sized banks such as ABC Brasil, Bicbanco and Daycoval should be the ultimate beneficiaries of these measures, Barclays says, given their sound credit risk profiles, allowing them to extend their funding terms at the same time as lowering funding costs. Banks in lending JVs with larger banks, such as BMG and Banco Votoratim could also benefit, either from the sale of a portion of their loan portfolios to their partners or from additional funding. Brazil’s Central Bank announced Friday a reduction in the additional reserve requirements for demand deposits – to 0% from 6% – and time deposits – to 11% from 12%. The measures are effective immediately and aim to add as much as BRL30bn ($14.78bn) of additional resources to the banking system.