EM bond funds posted inflows of $572m in the week ended January 27, EPFR Global says, adding that flows into funds investing in local currency issues accounted for nearly all of the money this fund group absorbed. Meanwhile, performance for the week ended January 28 was negative, according to Lipper. EM debt funds were down 0.66% in the week, but they are up 0.22% year-to-date. Global income funds dropped 0.33% in the week, but have gained 0.80% ytd and international income funds lost 0.38% in the week while rising 0.44% ytd.
Category: Daily Brief
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Amil Wraps up Tag Along
Amil, the Brazilian healthcare provider, says it has concluded a tag-along offer to minority shareholders of Medial Saude, the insurer it agreed to acquire for BRL612m in November. The tender to minority holders cost Amil BRL557m. It involved the purchase of the remaining 45% of the company’s shares it did not own at BRL17.50 per unit, which equals the price per share paid in November adjusted by the Selic.
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GEM Funds Lose Momentum
Outflows from GEM Equity funds were the worst in 23 weeks in the week ended January 27, while investors pulled money from LatAm equity funds at the fastest pace in 29 weeks, says EPFR Global. The fund tracker declines to disclose specific flow data. GEM equity funds had been on an 11-week inflow clip up to the previous week. Lipper data shows that for the week ended January 28, performance was also negative. LatAm funds lost 4.49% in the week and are down 9.58% ytd, making the latter the worst performer so far this year. EM funds dropped 3.81% in the week and 4.83% year-to-date, global small and mid-cap funds were down 3.09% for the week and 2.53% ytd.
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JBS Sells Converts to BNDESPar
Meatpacker JBS has raised BRL2.27bn through the sale of 1.3m convertible debentures to BNDESPar, the equity arm of Brazil’s development bank. The company does not specify terms on the notes. Starting today, it will begin distributing the remainder of the bonds that were not placed with the BNDES, which includes 697m debentures. It does not state which investors will participate in the deal.
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GVT Readies $180m Buyback
Global Village Telecom plans to repurchase all of its remaining 12% coupon 2011 bonds. The $179.4m outstanding amount represents 39.3% of the Brazilian telecom’s debt and will be bought back February 26. GVT is paying 102.5% of the principal plus unpaid interest from December. The bonds were issued by the GVT Finance vehicle in 2006. GVT says it will use its own funds to repurchase the bonds, which it must do as a result of Vivendi agreeing to take control of the company in November.
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Vale Ups Fertilizer Stake
Vale has unveiled a further step in its purchase of Fosfertil, following last week’s news that it has agreed to acquire Bunge’s stakes in BPI and Fosfertil for $3.8bn. After buying Bunge’s 42.3% stake in Fosfertil, which is listed on the BM&F, Vale moved to acquire an additional 15.5% in the company by purchasing a direct and indirect stakes belonging to Yara Brasil, another fertilizer developer. The move costs Vale $785m and gives it control over the equity capital of Fertifos, which in turn is Fosfertil’s controlling shareholder. The remaining stake in Fosfertil belongs to Mosaic. Itau analysts say it is not clear Vale will pursue the shares. The bank estimates that acquiring 100% of Fosfertil plus the stakes in BPI could cost Vale a total of $5.6bn. Vale says it has cash on hand to pay for the deal, but is also heard entertaining pitches for loan and bond financings.
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Independencia Approaches Buyside
Brazil’s Independencia is preparing to pitch the buyside on a new debt transaction, according to investors following the meatpacker. US boutique BTIG is managing the process, they say. It had previously been reported that Independencia is contemplating a $260m cross-border issue in lieu of a DIP facility it previously hoped to raise with funds and banks to help it start up operations. A BTIG fixed income official declines to comment.
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ISA Nabs Autopistas Deal
Colombian infrastructure company ISA has signed a contract with the government’s National Concession Institute (known as Inco in Spanish) to begin working on the construction of Autopistas de la Montana, a 1,251-km highway with a 40-year concession, which will require an investment of COP5.6trn ($2.8bn). Of the total, the Colombian government will provide COP1trn, the government of Antioquia will provide COP600bn, and the municipality of Medellin will give COP400bn. ISA will finance the remaining COP3.6trn. ISA CEO Luis Fernando Alarcon tells LatinFinance he expects construction to begin in 2011.
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Scotia Peru Plans DPR
Scotiabank Peru is preparing a $250m diversified payment rights (DPR) securitization, which should come by mid-February. The 7.00-year amortizing deal with a 4.83-year average life will be floating rate, according to a banker managing it. The transaction is backed by rights to electronic payment orders intended for payment to third party beneficiaries via Scotia Peru, such as trade financing or remittances, according to ratings report from Fitch, which assign an A mark. Credit Suisse is managing the sale. DPR transactions – favored by Latin banks during times when dollar funding is challenging – have slowed in the last 6-9 months as the bond markets have reopened up. The last deal in the region was a $100m 5-year and 10-year from Santander Brazil in August 2009, according to Dealogic.
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Batista Shipping Unit Edges to Float
OSX, the Brazilian offshore shipping company being formed by Eike Batista, is a step closer to going public. The company filed its charter with the CVM late Friday detailing rules surrounding capital and governance structure. It says it has been authorized by the board to raise equity capital of up to BRL10bn through the placement of ordinary shares. It does not state whether this would be done on the public market or with private investors. However, OSX has been widely cited as one of the main candidates for an IPO in 2010. In its charter, OSX says its goal is to be involved in shipbuilding as well as providing equipment and services for offshore oil and gas. Among the first steps for the company is to build a shipyard in the port of Biguacu, in the state of Santa Catarina, where OSX has already acquired most of the necessary development rights. The facility is expected to command an investment of $500m-$600m. The goal is to produce standardized vessels for exploration of Brazil’s offshore fields and lease them to Batista’s oil and gas company OSX, as well as to Petrobras and others in Brazil. Batista says much of the financing for the shipyard itself may come from the BNDES, due to alignment with Brazil’s plan to develop its natural resources. He also notes talks with Singaporean and Korean builders to have them build and develop the facility in exchange for a minority investment in the company. Batista’s recent focus on OSX has drawn attention away from an earlier plan of his to take public EBX, the holding company for all of his infrastructure companies, say executives close to Batista. The executive originally planned to raise up to $10bn on the stock market to capitalize the holding company and reduce subsidiaries’ reliance on the whims of the capital markets. As market conditions deteriorated, the plan became to raise a similar amount of cash via a giant infrastructure private equity fund. That idea seemed to fall on deaf ears with potential investors and sov