Category: Brazil

Banco Daycoval is preparing a three-year dollar bond due 2011 to follow up its $125m 2-year 2010 note issued in May. The Brazilian mid-size bank is heard aiming for a similar size at the longer tenor after the previous deal was two times oversubscribed. The transaction is expected as soon as next week through HSBC, Itau, and Banco Votorantim. The 2010 offering was led by HSBC, Santander and Banco Real.

Brazilan mining giant Vale said Tuesday that it is considering acquiring Caraiba Metais and Cibrafertil, two of the four companies held by Paranapanema, the natural resources conglomerate. Caraiba Metais specializes in non-ferrous metals, including copper, while Cibrafertil produces fertilizers. Vale says it hasn’t made any formal offers for the assets.

The two biggest shareholders of Brazilian power utility Light will look to raise up to BRL1bn in a secondary offering scheduled for the end of the month. BNDESPar, the investment arm of Brazil’s development bank, and France’s EDF, are heard looking to reduce their stakes in Light by 50% and 100%, respectively, say bankers close to the deal. At the end of October 2007, BNDESPar owned 33.7% of Light, while EDF held 6.6%, according to Economatica. With a market cap of BRL4.65bn, a successful execution would lead to over BRL1bn, not including a 15% greenshoe. Citi, Itau BBA and Unibanco have joint books on the offering, for which a series of calls and presentations began on Monday.

Brazilian development bank BNDES has approved a BRL540m financing package for Siderurigica Barra Mansa, a unit of Grupo Votorantim, it said Tuesday. The funds represent 45% of the Barra Mansa steelmaking facility’s expansion project, in which it will add a second unit to add one million long tons per year in production capacity. A bank official declined to disclose the tenor and interest rate when contacted by LatinFinance.

Bicbanco has approved a buyback program of up to 9.4m preferred shares over the next year, it said. The amount represents 10% of Brazilian mid-size bank’s total outstanding preferred shares. Its shares closed Tuesday at BRL8.29. The bank has sold $180m in 2010 dollar bonds this year, as it looks to expand.

Colombian energy company ISA, through its Brazilian subsidiary CTEEP, has won bids for five new energy transmission projects in Brazil for approximately BRL78m ($49m). The projects will be executed in the states of Parana, Santa Catarina and Rio Grande do Sul and in several locations of the state of Sao Paulo. Construction on the projects is expected to be completed in 18 months. ISA expects annual returns of BRL29m ($18m), which it will exploit for 30 years.

Brazilian mining giant Vale has handed banks that agreed to lend it $50bn in March to acquire Xstrata handsome equity underwriting mandates in its upcoming $14bn offering. The move is apparently a gesture to thank the bank lenders for their commitments, despite that many of the bookrunners to-be aren’t obvious choices for a deal of this scale. The follow-on is heard to be launching imminently with an updated prospectus confirming the roles. Credit Suisse is leading the process and is heard joined by a top tier of bookrunners that includes HSBC, Santander JPMorgan and Citi, say bankers. The first two took $7.3bn tickets in the Xstrata loan but are relatively new to ECM in the region. In a more junior group are banks such as BNP Paribas, RBS, Calyon, Itau BBA, Bradesco, Unibanco and Banco do Brasil, say bankers close to the process. The first three in that group are almost strictly debt shops as far as LatAm goes, and yet have garnered roles in the biggest LatAm equity deal ever filed. Noticeably absent from the group of 12 banks leading the marquee Vale deal are UBS, Morgan Stanley, Lehman Brothers, Merrill Lynch and Goldman Sachs – many of whom boast strong global equity franchises and are building up aggressively in LatAm. A Vale finance official declined to comment, citing a quiet period.

Brazil’s Parana Banco plans to raise $100m through the sale of 2011 bonds. The niche bank specializing in payroll discount lending expects to begin a US and European roadshow soon, pending regulatory approval, according to an official at the bank. S&P has rated the notes B+, reflecting a strong record in the bank’s niche market, but also the growth challenges it faces within that market. Dresdner is managing the transaction. The bank raised BRL604.8m in a June 2007 IPO.

Brazilian real estate developer Gafisa has completed its BRL250m 2018 debenture issue. The bonds are rated A on a national scale and pay interest at 107.2% of the DI rate. Proceeds will be used for general capital needs, including the repayment of debt and investing in real estate projects. Banco do Brasil and Banco do Nordeste managed the sale.

Brazilian state-run bank Caixa Economica Federal has agreed to provide mortgages for clients of real estate developer Camargo Correa Desenvolvimento Imobiliario. The lender will provide approximately BRL4.2bn to cover a total of 35,900 housing units to be developed by Camargo, over a period of six months. The total includes BRL2.2bn for 22,000 units developed by HM Engenharia for the low-income segment. The interest rate varies based on the prices of the units involved, Camargo said, ranging from TR plus 5.5% to TR plus 11.0%.