A February 7 brief entitled “BdB Accelerates Dollar Lending,” includes an inaccurate listing of Banco do Brasil’s 2009 deals as outlined by a bank official. A BdB spokesman clarifies that the bank did not participate in a pre-export loan to Cosan.
Category: Daily Brief
Posted inDaily Brief
Moody’s Drops Lupatech Rating
Moody’s has chopped the rating on Brazil’s Lupatech to B2 from B1, amid continued cashflow and operating margin pressures. “Even though Lupatech has likely benefited from the resumption of bids for equipment and services in late 2009 by its most important client Petroleo Brasileiro, the conversion of the additional backlog into sales and cash flow should only materialize over the longer term,” it says. Moody’s notes that operational inefficiencies derived from persistent low capacity utilization are likely to continue. It sees total adjusted debt to Ebitda peaking at 13.0x in the first half 2010, up from 8.8x in September. The agency put the oil and gas equipment manufacturer under review in November. At the time, Lupatech was wrapping up a 7-month liability management operation that featured a BRL121m credit facility from the BNDES and a BRL320m 2018 convertible debenture sale that was 90% bought by BNDES. Lupatech also recently got debentures holders to waive breached financial covenants and postpone the next verification date to December 2010, when Moody’s expects Lupatech to be back in compliance with financial covenants. Lupatech has $275m outstanding in 9.875% coupon perpetuals. The rating outlook is stable.
Posted inDaily Brief
Costa Rica Ratings Affirmed After Chinchilla Win
S&P has affirmed Costa Rica’s BB/B foreign currency ratings and stable outlook after Laura Chinchilla, of the National Liberation Party, won presidential elections Sunday. Credit analyst Joydeep Mukherji says that “the stable outlook reflects our expectation that the next administration of president-elect Chinchilla will maintain stability in key economic policies.” He adds that “the recent increase in the general government fiscal deficit likely will be reversed this year as tax revenues rise along with a recovery in GDP growth. As a result, the government’s debt burden likely will remain stable in coming years.”
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Pinera Taps Larrain for Finance Ministry
Chilean president-elect Sebastian Pinera has named Harvard-educated economist Felipe Larrain finance minister, according to local press reports. Larrain, an economics professor at the Pontificia Universidad Catolica de Chile and member of the board of several companies in Chile, advised Pinera on economics during the campaign process. University of Chicago-trained economist Juan Andres Fontaine, currently the chairman of the board at the Bolsa Electronica de Chile, was named Economy Minister. The new administration takes office March 11.
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Cemex’s Medina Steps Down
Mexico’s Cemex has named Fernando Gonzalez as vp of Finance and Legal, replacing Hector Medina, who will retire March 1. Medina and Armando Garcia, executive vp of technology, energy and sustainability are taking an early retirement program the cement maker has for senior executives. Garcia will remain on the board. Gonzalez has been with Cemex since 1989, most recently as executive vp for planning and development. He has also headed Cemex businesses in Europe, Middle East, Africa, Asia, South America and Australia.
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Eton Park Invests in HydroChile
Investment shop Eton Park says it will invest $200m of equity in hydroelectric energy company HydroChile to take an 83% stake, the company says. Eton says its investment will help the Chilean company develop at least 200MW of run-of-river capacity in the 6th, 7th and 8th regions of Chile. HydroChile was founded in 2007 and develops run-of-river hydroelectric power projects with capacities ranging between 10MW to 50MW. Eton Park, which also holds a 28% stake in Brazilian renewable energy company ERSA, manages about $13bn and has offices in New York, London and Hong Kong. It invests in infrastructure assets in emerging markets with a focus on LatAm.
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CSN Gets BRL1bn
CSN has borrowed BRL1bn from Caixa Economica Federal through a bank credit transaction known as a CCB. Funds obtained from the 3-year deal under the government-owned bank’s Credito Especial Empresa program will be used for liability management. It obtained BRL2bn through a similar 3-year deal from CEF in August to obtain working capital. The Brazilian steelmaker is currently undergoing a public tender process for the outstanding shares of Portuguese cement maker Cimpor.
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Peru Securitizer Sets Debut RMBS
Titulizadora Peruana is targeting Feburary 15 for its first ever mortgage-backed security offering, according to its finance director. The securitization specialist owned by Colombiana has been pitching the deal worth up to $35m to local investors. The 20-year paper, backed by mortgages from BCP and Interbank, has an average life of 9 years and will pay fixed rate. The bond is dollar-denominated to match the currency of the loans. Subordinated bonds will represent about 6% of the issuance. BCP’s Credibolsa unit and Inteligo are placement agents for the deal, rated AAA on a national scale.
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Abengoa Advances Syndication
Abengoa, which is raising a $460m 7-year loan for a 300MW co-gen power plant in the Mexican state of Tabasco, is heard to have clinched the funds through a limited syndication. The deal was launched in November and moved slowly because of a need for technical and engineering analysis, say executives on it, who expect closing by the beginning of April. The facility pays a step-up spread starting at Libor plus 412bp for the 36-month construction period, and rising to 437bp through month 48, 462bp through month 60, and 562bp through month 78. Fees are 325bp. Some 10 banks have been invited to participate. Only lead Santander, and BES and Banobras, which fully underwrote the facility when a club of banks supporting it initially fell apart last year, have been confirmed. The co-gen facility counts on offtake from Pemex. The $460m represents 70% of the project costs and a remaining $200m will come in the form of equity from Abengoa. Santander and BES have committed a $40m bridge to Abengoa that will be taken out with proceeds from the syndication.
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Gafisa Revives Equity Issue
Brazil homebuilder Gafisa says it plans to issue BRL900m-BRL1bn of equity in the coming weeks. The move follows a substantial recovery in Gafisa’s stock price since it withdrew plans to place around BRL700m in equity last June. The company’s announcement last year prompted a selloff of more than 10% of the stock price, which in turn led Gafisa to scrap plans to issue. Since mid-June, however, Gafisa shares have risen more than 50%, making an attractive issuance point for the homebuilder. Proceeds are earmarked for land acquisitions, M&A, new launches, working capital and investments in existing projects, says Gafisa in its prospectus. Itau BBA and JPMorgan are leading the offering, whose prospectus does not detail a precise timeline. In Q4 2009, Gafisa approved a plan to issue BRL600m in 2014 local debentures via Caixa Economica Federal. But the issue was never printed, according to the CVM.