EM debt funds booked net inflows of $1.63bn during the week ended September 12, according to EPFR. In terms of performance, the asset class was up 0.85% for the week ended September 13, for a year-to-date gain of 13.64%, according to Lipper. Global income funds gained 0.91% during the week, and are up 6.80% ytd. International income funds rose 1.69% during the week, for a 6.94% gain ytd.
Yearly Archives: 2012
Posted inDaily Brief
Equity Funds Gain Inflows
LatAm equity funds saw net inflows of $170m and EM equity funds saw net equity inflows of $447m during the week ended September 12, according to EPFR. In terms of performance, LatAm funds gained 3.59% during the week ended September 13, and are up 7.54% year-to-date, according to Lipper. EM funds rose 3.27% during the week, to bring them to a ytd gain of 11.05%. Global small and mid-cap funds rose 2.82% on the week, and have earned 14.95% ytd.
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IDB Lends $700m in Argentina
The Inter-American Development Bank (IDB) has agreed to provide $700m in funding to Argentine government programs, it says. A $500m, 24-year loan with a 6.5-year grace period and variable interest rate based on Libor will help fund improvements in the Norte Grande region, with a focus on water collection, treatment, and distribution, as well as the handling of sewage and storm water. The government will weigh in with $55m in counterpart funding. Meanwhile, a $200m, 25-year loan with a 5.5-year grace period and variable interest rate, paired with local financing of $66m, is set to support business projects and enable public-private consortia work. The development bank declines to offer additional details.
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ISA Considers Refi
Colombia’s ISA could look to refinance at least $300m of debt tied to its Peruvian operations through a transaction in the international markets, CFO Camilo Barco tells LatinFinance. He expects his company would generate substantial investor interest, based on a flight to quality mentality among buyers and the perception of ISA as a low-risk name in a popular sector. ISA, which operates in Brazil, Peru, Chile, Bolivia, Ecuador, Argentina and Central America, last issued bonds in December of last year. The $154m-equivalent sale included 12 and 30 year domestic notes.
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Lupatech Readies Share Auction
Lupatech is preparing to sell up to BRL439m ($217m) in new shares, as part of a BRL700m capitalization plan agreed earlier this year, it says, and will set a date for a public auction as soon as it receives regulatory approval. The maker of parts for the oil industry is offering 109.8m shares at BRL4.00 each, a price agreed in April by its major shareholders. Shareholders BNDESPar and Petros are obliged to subscribe BRL184m, as well as pick up any additional unsold shares in the auction in order to achieve a minimum BRL300m size. Banco Votorantim is managing the process.
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Mexichem Tops 75% in Tender
Mexichem has received acceptance from holders of $267m or 76.32% of its $350m outstanding 8.750% 2019 bonds, it says, in a tender offer closed last week. In addition, the chemicals producer has received the minimum consent needed to eliminate restrictive covenants. Mexichem offered holders $1,245 cash per $1,000 principal, which includes $30 for adopting proposed covenant amendments. The tender is funded by last week’s well-bid sale of 10 and 30-year bonds. The sale included $750m in 4.875% 2022 bonds priced at 5.000% yield and $400m in 6.750% 2042 bonds priced at par. Mexichem amassed about $17bn in total orders. Citi, HSBC, JPMorgan and Morgan Stanley led the tender offer and the last week’s bond sale. The quartet is also managing an equity follow-on transaction, expected to raise as much as $1bn, that is awaiting launch.
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Rossi Renegotiates Covenants
Rossi Residencial is in the process of renegotiating covenants with Brazilian Securities for one of its domestic debt issuances, it says. The bonds were sold entirely to Brazilian Securities in order to back a sale of Certificados de Recebiveis Imobiliarios (CRI) in Brazil’s domestic market. The Brazilian developer expects negotiations to proceed “without difficulty.” It adds that similar agreements have been reached with Bradesco, Caixa Economica Federal and BTG Pactual regarding covenants on other domestic bonds. It does not elaborate on the restrictions to be adjusted, but says the renegotiations will help “allow potential improvements to accounting practices.” Rossi is also preparing a private share subscription that could raise as much as BRL500m ($245m).
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Without Buyer, Cruzeiro do Sul to be Liquidated
Banco Cruzeiro do Sul is to be liquidated, Brazil’s Central Bank says, after the Fundo Garantidor de Credito (FGC) failed to find a buyer for the mid-size lender. The decision puts an end to a process that began with fraud investigations and which the FGC tried to resolve through a 51% haircut on the bank’s dollar bonds and attempt to find a buyer among Brazil’s larger banks. The FGC offer to bondholders expiring last week got 88.7% acceptance, the FGC says, though the tender was contingent on the bank finding a buyer. It had been looking to offer holders cash for $1.58bn in bonds in a process led by Bank of America Merrill Lynch and HSBC. Brazil’s central bank seized Cruzeiro in June after finding “unsubstantiated asset items,” and the bank was under the temporary administration of the FGC during an investigation. The debt default is said to be the region’s biggest since 2002. Banco Prosper, which Cruzeiro agreed to buy last year, is also to be liquidated. About 35% of Banco Crizeiro do Sul’s deposits and 60% of Banco Prosper’s are guaranteed by the FGC.
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Moody’s Raises Ecuador
Citing solid sources of funding and a track record of payments since a 2008 default, Moody’s has raised Ecuador’s credit rating to Caa1 from Caa2. The agency sees economic and fiscal indicators that compare favorably to medians for Ecuador’s sovereign peers, most of whom are B rated, as well as new external funding from China and other sources. Moody’s also notes Ecuador’s highly external creditor base and oil sector dependence among current challenges. The outlook is stable.
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Puma Nears Close
Puma Energy, a subsidiary of commodity trader Trafigura, is heard looking at a closing by the end of the month for its $330m 5-year syndicated loan. The funds will be used to pay for the acquisition of gas stations and storage facilities in Central America and the Caribbean from Exxon completed earlier this year. Citi is leading the deal.