UBS has hired ex-Citi banker Carlos Corona for its LatAm DCM team and Rod Eichler, ex-RBS, for its EM debt, currency and derivatives sales group, according to an official at the bank. Corona started this week as executive director and senior originator on the DCM team reporting to Mark Tuttle. He was previously with the LatAm loans group at Citi. Eichler will join the debt, currency and derivatives sales group in April, reporting to David Cannon.
Category: Daily Brief
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Peru Securitizer Preps Debut RMBS
Titulizadora Peruana is presenting investors this week with its first ever mortgage-backed security offering. The deal for up to $35m should price in the next 2 weeks, says Jefferson Ganoza, director of structured finance and risk management at Titulizadora. The 20-year paper, backed by mortgages from BCP and Interbank, has an average life of 9 years and will pay a fixed rate. The bond is dollar-denominated to match the currency of the loans. About 60% of Peru’s $4.5bn mortgage market is dollar denominated, Ganoza says. 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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EPM Awaits Deal Nod
The telecom unit of Colombia’s Empresas Publicas de Medellin has submitted its plans for a bond issue of up to COP1trn ($504m) to the local regulator for approval. A company spokesman says that the exact amount to be issued and terms have not yet been determined. He adds that proceeds will be invested in new technology and company growth. BRC Investor Services has given the issue an AAA rating.
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EMP Financing Palm Oil Company
Washington DC-based investment fund manager EMP Global is extending $17m in financing to Mexico palm oil producer Promocion e Industrializacion de Palma (PIP) and subsidiary Propalma through its CentAm Mezzanine Infrastructure Fund (Camif). The financing, structured as a long-term mezzanine loan, will allow the company to consolidate its ownership of Propalma and other operating companies and also will provide resources for the company’s expansion. Creel García-Cuellar Aiza y Enriquez acted as counsel to Camif, with Covington & Burling acting as special US counsel. Olea Abogados was counsel to PIP.
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Voto Gives Guidance to Hostile Market
While turmoil in the global markets causes issuers to rethink plans, Brazil’s Banco Votorantim appears to be pressing ahead with a bond issue. It has put out 4.375% area guidance on a new 2013 bond. Investors expect a $500m transaction and pricing is expected early next week. The Baa2 deal through BNP, Banco do Brasil, Bradesco and UBS will add some senior debt to the bank’s capital structure following a subordinated sale last moth. The 2020 Tier 2 sale saw demand of $3.6bn and priced at par with a 7.375% coupon. BofA-Merrill Lynch, Banco do Brasil, Deutsche Bank and Itau managed that sale.
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Pemex Extracts Cash from MXP Desert
The sun appeared to be shining in at least one corner of the financial markets Thursday, as Pemex raised MXP15bn from a 3-tranche bond sale in Mexico’s domestic markets. The transaction marks Mexico’s first corporate bond deal of the year and bankers hope that it sparks more activity. An MXP8bn 5-year floating-rate tranche pays TIIE plus 70bp, a MXP5bn 10-year fixed piece pays 9.10%, and a MXP2bn tranche denominated in the UDI inflation-linked unit pays 4.20%. Total demand for the 3 tranches was close to MXP36bn, according to bankers on the sale. “It is clear there is a lot of liquidity,” says one. Tapping into that liquidity has been difficult for Mexican borrowers do far this year, however. The country’s institutional investors have demanded tighter covenants for all but the very top issuers. BBVA, HSBC and Santander managed the sale, rated AAA on a national scale. The issuer was not immediately available for comment.
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Gavea to Raise New PE Fund
Brazilian asset manager Gavea Investimentos plans to begin raising its fourth private equity (PE) fund this year, says Arminio Fraga, co-founder of the firm, and chairman of BM&FBovespa’s board. “Companies are interested in investing again and are seeking capital,” he says. “We plan to go out to our investors [soon] to raise a new fund,” adds Fraga, speaking in New York following a talk on the state of Brazil’s economy. Fraga notes that Gavea is closing in on up to 3 new minority positions in private companies with cash from its third, $1.2bn fund, raised in 2008. They involve 2 minority investments of roughly $130m-$170m each in education and real estate companies, respectively, and a third restructuring-type investment of around $60m. Those will leave room for 3 more investments, which will leave the current fund fully invested, says Fraga. That will lead Gavea to raise a new fund, which the executive says will likely be at least the same size as the previous one. Fundraising came to a grinding halt at the start of the financial crisis and as companies hunkered down, cut investment plans and focused on survival. PE firms also turned to tending to portfolios and keeping them afloat, rather than chasing investment opportunity. Few if any in the region announced major new investment. New investment opportunities are now appearing, helping thaw LatAm PE.
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PDG Realty Prints Follow-On in Down Day
Brazilian real estate developer PDG Realty has raised BRL1.6bn through a follow-on priced in one of the worst days the Bovespa has seen in months. The stock fell 3.63% in the session to BRL14.60 and the shares were priced BRL14.50, at virtually no discount. A banker on the deal says Thursday’s drop, which was smaller than the Ibovespa’s 5% plunge, was in itself a substantial discount to recent trading levels. The company sold 97m shares plus a 14.6m share greenshoe to raise BRL1.62bn. Priority investors, which include former Pactual partners and Vinci, the fund formed upon the dissolution of Pactual Capital Partners, purchased around 25% of the issue. Credit Suisse, Pactual, Itau BBA, Goldman Sachs, Santander and Bradesco BBI led the deal.
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Risk Spike Hammers Brazil Issues
A global markets rout amid fears of default in Greece, Portugal and Spain is beginning to infect LatAm. After a botched Brazil IPO this week, a pair of debt issues appears to have run into trouble. A 2015 bond transaction from BES Investimento do Brasil has been postponed, according to investors following it. Baa2/BBB minus BESI was set to finish a US and European roadshow Thursday marketing a deal expected at $350m. Deutsche Bank, Espirito Santo and Standard Bank were running it. Worries across global markets also resulted in radio silence on a debut $200m 2015 bond from grower Vanguarda do Brasil, which had been roadshowing through Tuesday. Officials familiar with the B3/B minus transaction say the sale is still being negotiated with investors, and that as of late Thursday, there was still a plan to launch. Morgan Stanley is leading Vanguarda. Also hoping to do bond deals from Brazil are Marfrig (B1/B+) and Independencia. However, risk aversion is rising and LatAm issuers need to move swiftly to avoid being caught in the crosshairs. “Latin America is vulnerable to a crisis in Southern Europe or any other emerging market,” says a veteran EM trader. He adds that hedge fund purchases of Eurozone CDS, combined with short selling of developed world stocks, has the ability to seriously destabilize LatAm. “The world has gotten much smaller, and sovereign debt is susceptible to vulture investor tactics,” he adds. The Bovespa ended almost 5% lower on the day and Mexico equity fell more than 2%.
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Superfinanciera Ticks Codensa Issue
Colombia’s securities regulator has given energy company Codensa the green light to issue up to COP600bn in bonds. The issue, rated AAA, will have 5 tranches with maturities between one and 25 years. The tranches will be COP, UVR or USD-denominated and pegged to DTF, IPC or IBR or pay a fixed rate. A company spokeswoman says the timing of the issue has not been decided and that it has not been mandated. Codensa is owned by Spanish energy company Endesa.