Category: Brazil

Chilean wood board maker Masisa is putting together debt refinancing in Chile, and seeks funds for expansion in Brazil. It is assembling a refinancing of $100m in short-term debt, CFO Eugenio Arteaga tells LatinFinance, and also considering the international syndicated loan markets or issuing dollar or UF bonds at home in Chile. “Spreads have widened and liquidity is a little tighter,” he says. “What maybe more attractive is a club deal, with distribution to a few banks – three to five banks that may take the company risk and structure something attractive to our terms.” CEO Enrique Cibie says the wood producer aims to focus more on forestry, to ensure a healthy supply of raw material, especially in Brazil, which it sees offering great demand going forward. To help fund this and a new production plant in Brazil, Cibie says Masisa is considering divestures over the next 12 months, and pursuing up to $65m in BRL-dominated funds from the BNDES.

Three Brazil-focused senior executives and two private bankers have left the UBS wealth management team, leaving a gap in the upper echelons of the LatAm business. The departures further undermine the Swiss bank’s Brazil franchise, which is already under pressure after the defection of several high ranking investment bankers. Flavio Souza, a Brazilian executive who headed the Brazil private wealth management desk out of Zurich, has left for Itau, apparently for a higher paying job. He is replaced by Michael O’Keefe, who worked below him. Ernesto Leme and Marcos Hatushikano, two senior executives responsible for covering some of the group’s deep pocketed clients, have left to start a new team at local asset manager Claritas. They are apparently joined by Pedro Madia and Eduardo Marques, with whom they worked at Pactual, say people with knowledge of the matter. Among the incentives for their departure was the opportunity to be partners in their own business – a model widely employed at Pactual prior to its merger with UBS that drew aggressive climbers to the bank. Earlier this year a team of investment bankers left UBS Pactual for Merrill Lynch, a move that was followed by a broad-based defection of over a dozen traders and executives to a new fund, including LatAm chairman Andre Esteves.

Gerdau, the Brazilian steelmaker, says it will pour $1.4bn in new funds into its Siderperu plant, located in the northern coastal town of Chimbote. The purpose of the capital injection is to increase the plant’s installed capacity to 1.5m tons by 2011 and 3.0m tons by 2013. That would mark a sixfold increase in production, says the company. “Peru is a strategic country for Peru because it is a market with great potential for further development,” CEO Andre Gerdau Johannpeter says in a statement.

EDP-Energias do Brasil, the Brazilian subsidiary of Energias do Portugal has agreed to sell the 48.51% it owns of Brazilian cable and internet company Esc 90 to Net Servicios de Telecomunicacoes for BRL94.6m. The sale is part of EDP’s strategy to divest assets not related to its main business line, the company says. The transaction awaits approval from the Brazilian regulator.

The big 2 Brazilian banks are in dead heat for winner of the region’s best financial institution for corporate governance. But one is inching into the lead. Itau and Bradesco get the same overall top score in this year’s LatinFinance study in association with Madrid-based consultancy Management & Excellence (M&E). Bradesco and Itau have used CSR, sustainability and CG as battlegrounds since the turn of the century. Both are very sophisticated, but Bradesco seems faster to advance. “Bradesco is probably the most sustainable bank,” says William Cox, managing director at M&E. “Itau is going to slip next year – they are just too slow.” M&E notes sustainability as a strategic priority at all levels for Bradesco, as well as technical sophistication, excellence in operations, a culture of quality control, quick decision-making, fast implementation of technical and strategic innovations, rapid globalization in IR, consolidating CSR programs, and broad geographic representation in Brazil. Among weaknesses is the risk of overly burdensome CSR, which weighs on costs. According to a recent Citi report, LatAm investors will pay a 22% premium on average for an investment with good governance. M&E also sees significant potential for BCI Chile, which has strong internal risk control systems, improving returns, a broadening client base, modern corporate governance, and solid growth. However, the fact that it offers outdated information in English limits its reach to global investors. For full report, go to www.latinfinance.com/banks08

BNDES plans to make available $200m in financing for Brazilian companies to buy Argentine capital goods, according to the Argentine president’s website. An agreement is expected to be signed when resident Cristina Kirchner visits Brazil at the beginning of next week.

Fitch has changed the outlook on Brazilian railroad firm America Latina Logistica (ALL) to positive from stable. The action reflects the company’s consistent and improving operational performance, evident in its cash generation measures, the agency adds. “Fitch expects that ALL’s consolidated credit measures will continue to strengthen in 2008 and 2009, reflecting the positive growth and performance of its business and the synergies that have been efficiently captured among the various networks that comprise the group,” the agency says. Fitch also affirms the local and foreign currency long-term ratings at B+ and the local scale rating at BBB+, it says. ALL’s railroad network, some 20,000km in extension, mainly transports soybeans and other agricultural and industrial products in Brazil and Argentina.

Brazilian mid-cap bank BicBanco has raised $90m through an add-on B facility, a follow-up to its $100m 3-year A/B loan raised in June 2007. The 3-year bullet pays Libor plus 185bp. Last June, the $80m B loan it raised came at 150bp over Libor, while the $20m 5-year A loan carries a margin of Libor plus 175bp. Leads for the follow-up transaction include Banco Real – now Santander – WestLB and Commerzbank. HSBC and Standard Chartered are arrangers and Israel Discount Bank came in as a participant.

Brazilian real estate company Gafisa said Monday it will buy a controlling stake in Tenda, a publicly traded low-income housing developer. Tenda shares closed up 25% at BRL4.69 after skyrocketing following the pre-opening announcement Monday. The move continues an ongoing trend of consolidation in Brazil’s homebuilding sector. Tenda will be merged with FIT, Gafisa’s low-income housing unit. Gafisa, a leading developer of high-end residential properties, will control 60% of Tenda’s shares and the target will continue to be listed on the Novo Mercado. Rothschild advised Gafisa while Banco Modal advised Tenda. More details on the deal are forthcoming in a call set for 1100 EST today.

Votorantim has agreed to sell its 40% stake in a paper-producing factory to partner Ahlstrom of Finland for BRL67m. The Brazilian paper and pulp producer exercised a sell option that was part of the joint venture agreement to build the facility in Jacarei, Sao Paulo agreed last year. VCP made the move as part of its efforts to divest paper assets and focus on pulp production.