Category: Brazil

Brazil’s Banco Votorantim is out with 7.5% area yield guidance on a new Tier 2 bond, set to price as early as today. The bank plans “benchmark” size, which generally means at least $500m. It was due to have limited investor meetings Monday and today, after having visited the buyside on a more extensive “non-deal” roadshow in December. Bank of America-Merrill Lynch, Banco do Brasil, Deutsche Bank and Itau are managing the sale, which will raise funds for general corporate purposes.

Empresa Interagricola (Eisa,) the Brazil-based unit of commodity shop Ecom, has raised a $50m credit line with a group of international banks. The 1-year senior pre-shipment export facility, which pays Libor plus 250bp, was closed in the final week of December. Proceeds will support the company’s exports, which include largely cotton and coffee. Standard Chartered led the deal with Natixis, ING and Fortis joining as joint books.

BNDES has approved a BRL826.1m financing for Sao Paulo water utility Sabesp, through the private purchase of 11-year bonds. The amount is to be split into 3 separate BRL275.4m transactions. The first wrapped up before year-end and includes BRL192.7m in notes paying TJLP plus 1.92% and BRL82.6m paying IPCA plus 9.79%. The next transaction will close this year and the third in 2011. Proceeds will fund Sabesp’s BRL1bn investment plan, including 5 projects to build and upgrade waste systems, and make water systems more efficient and less energy-intensive. Separately, Sabesp is in the process of completing a BRL600m 2014 bond in the public market through Banco do Brasil. That A+ transaction is expected to pay DI plus up to 3.5%.

Wal-Mart’s Brazil unit has suspended a supply contract with Cosan after the Brazilian sugar producer was included on a government list of companies whose workers operate in slave-like conditions. Cosan has expressed surprise at the decision to put it on the list and is pursuing legal channels to clear its name. According to Cosan, it was put on a blacklist because “a services provider to sugarcane suppliers which are also part of Cosan’s supply network” infringed a labor regulation in 2007. Cosan says it took measures to exclude the firm from its sugarcane supply network and says it “vehemently repudiates any kind of practice that infringes labor rights of its employees and the employees of its partners or suppliers.” Wires reported that Cosan stock rallied late Friday on news that the Brazilian agriculture minister had conceded that the blacklisting was a mistake. Cosan issued a statement saying a regional labor court has approved a request for the removal of the company’s name from the labor ministry’s list of companies that employ workers under slave-like conditions.

French entertainment and telecom company Vivendi is launching a tender offer for up to 18.1m outstanding common shares in GVT, corresponding to 13,22% of the total capital. The offer price is BRL56, paid in cash and the deal is through an auction in the electronic trading system of BM&FBOVESPA. Vivendi said last week it had raised its stake in the Brazilian telecom operator to 85.7% from 78.7%. In November, it announced that it had acquired a 57% stake in GVT through a combination of private negotiations with the telecom’s controlling shareholders and open market purchases, valuing the target at BRL7.17bn. GVT was advised by Barclays, Credit Suisse and Goldman Sachs. Vivendi was advised by BNP and Calyon.

Brazil’s Trisul plans to raise BRL300m from Caixa Economica federal through a 2015 debenture transaction. In the deal similar to one the federally backed bank did last year for fellow real estate developer Tenda, Caixa will release the funds from the FGTS guarantee fund into a special account Trisul can use for project development, according to a Trisul IR official. A portion of the issuance will pay interest at the TR rate plus 8.5% and the remainder at TR plus 10.5%, depending on the value of the projects Tenda acquires with the funds. The deal is managed by Planner Corretora and features a 3-year grace period. The developer aims to close the transaction by the end of the month or early February. Trisul is rated A minus on a national scale.

Banco Votorantim is targeting next week for the sale of 10-year Tier 2 bonds. The Brazilian bank plans a “benchmark” sized issue, which generally means at least $500m. It is holding calls today ahead of 1-on-1 meetings Monday in New York and possibly Tuesday in Boston. Marketing is being kept short, as the issuer met US and European buyers last month on a “non-deal” road show. Pricing is expected in the middle of next week. Bank of America-Merrill Lynch, Banco do Brasil, Deutsche Bank and Itau are managing the sale, after having handled last month’s meetings. Proceeds from the Baa2 sale are for general corporate purposes. Votorantim last tapped markets in 2006, with a $200m in 6.75% of 2016 bonds through BNP and Citi. Bradesco reopened the post-crisis Tier 2 market for the region in October with $750m in 2019 Tier-2 bonds priced to yield 6.75%. Compatriot Banco BMG followed with $300m in 9.95% of 2019s to yield 10.25%.

The board of Portuguese cement producer Cimpor recommends shareholders reject an offer by Brazil-based CSN to acquire the company for EUR5.75 a share, which values all of the outstanding equity at EUR3.86bn. Cimpor’s board prefaces a 66-page report posted on its website Thursday, with an impassioned plea for a dismissal of the overture, calling it “hostile, irrelevant and disruptive to its business activities.” The report claims CSN’s bid is flawed in that it lacks required information on financing, regulatory approval to conduct the process, and other critical information. Cimpor shares rose 1.06% on the Lisbon exchange to close at EUR6.50, leaving it with a market cap of EUR4.37bn. Separately, CSN says it is buying a 9.4% stake, or 802,069 shares, in flat steel manufacturer Panatlantica from LP Acos Comercio e Participacoes, also based in Brazil. It does not say how much it is paying for the stake. Panatlantica’s assets as of September 30 totaled BRL206m and it has a market cap of BRL120m, according to the Bovespa. On January 7, Panatlantica’s shares were up 15% at BRL14.

French entertainment and telecom company Vivendi SA has raised its stake in Brazilian telecom operator GVT Holding to 85.7% from 78.7% last month, according to the target. Vivendi now has 117.7m of the 137.2m shares comprising GVT’s capital, versus 73.8m in November. “Vivendi aims, with this increase in participation, to further consolidate its controlling interest in GVT,” says GVT. Vivendi adds that all the call options acquired on November 13 were exercised before December 23. Vivendi in November announced that it had acquired a 57% stake in the Brazilian operator through a combination of private negotiations with the telecom’s controlling shareholders and open market purchases, valuing the target at BRL7.17bn. The French company launched a public tender offer for the remaining 43% of the company at BRL56.00, a 33% premium to its initial verbal bid for GVT at BRL42.00, made in September. GVT was advised by Barclays, Credit Suisse and Goldman Sachs. Vivendi was advised by BNP and Calyon.

Brazilian power transmitter CTEEP has sold BRL549m in domestic bonds. A BRL491m 2014 tranche pays the DI rate plus 1.3%, and a BRL57.6m 2017 piece pays fixed 8.1%. Proceeds will be used to finance capex and pay down debt. Itau managed the sale, rated AA on a national scale. CTEEP is a unit of Colombia’s ISA.