Category: Brazil

Brazil’s PDG realty plans to raise BRL750m-BRL850m through a primary share offering, as it makes use of improving market sentiment to raise funds for new projects. The developer plans to offer 56m shares, and arrives at the total range based on Monday’s close of BRL27.70 and considering a September 9 one-for-two share split. The lead bank may also exercise a 15% greenshoe. Investor presentations and bookbuilding are expected to begin September 21, with pricing likely October 1, according to the offering prospectus. UBS will manage the transaction, alongside Itau and Goldman Sachs. PDG shares closed Tuesday at BRL25.49. It is also preparing to raise up to BRL300m through the sale of 2014 debentures.

Brazil’s central bank is expected to leave the monetary policy rate at 8.75% following Wednesday’s meeting, having reduced it by 500bp since the start of the year. “Both the communique and the minutes of the July meeting widely telegraphed the board’s intention to interrupt the easing cycle, in our view,” says Bank of America-Merrill Lynch, adding that the bank “could more forcefully signal its intention to leave rates at the current level for an extended period of time.” Morgan Stanley, which also sees Brazil pausing, says that some board members of the bank considered not cutting at the July meeting.

Brazil’s Banco Cruzeiro do Sul is readying a $150m 3-year cross-border bond, according to a banker managing the sale, in a transaction likely to come mid-September. The Ba2 rated mid-size payroll lending specialist expects to pay a yield in the 8.50% area. BCP Securities is running the Reg S transaction. In June, Cruzeiro became the first mid-size Brazilian bank to issue in nearly a year, with a $60m sale of 9.00% notes priced to yield 9.75%, also via BCP.

Brazilian real estate investment company PDG Realty has authorized the sale of up to BRL300m in 2014 debentures. The issuer does not name the bank managing the sale or the price it expects to pay. It also approved a share split, to occur at an unspecified date in the future. PDG sold $276m in convertible 2012 debentures in April in a transaction guaranteed by BNDESPar.

Petrobras stock dropped Monday after the company said it was looking to issue equity amid proposed changes to the regulatory framework for oil and natural gas exploration and production. The Brazilian oil producer is planning an extraordinary general shareholder meeting to approve the capitalization, which may include participation by the state. Romero Juca, the government’s leader in the Senate, says the plan calls for a state capital infusion of about $50bn in Petrobras to boost federal control over the firm, according to wire reports quoting the politician. Petrobras closed 4.48% lower at 37.53 Monday, with sellers reportedly mobilized by uncertainty about the announcement. It follows news that Brazil will introduce a new contracting system, dubbed “shared production,” for oil and natural gas exploration and production in pre-salt areas and places declared strategic by the national energy policy council. Petrobras will keep a minimum 30% stake of areas that are auctioned, and it may also participate in the bidding to increase its ownership.