The January 28 daily brief item “Geo Puts CCD on Ice,” misstates the transaction that Mexico’s Geo has canceled. An MXP500m ABS was shelved. A Certificados de Capital de Desarollo (CCD) for its Geo Maquinaria unit, through Banorte and Santander, is still under consideration, says Hans Schroeder, GEO’s head of investor relations and corporate financial planning.
Category: Daily Brief
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Brookfield Grows Brazil Debt Issue
Brazilian real estate company Brookfield Incorporacoes says it is upsizing its local debenture issue to BRL366m from BRL300m. The issue will be made in 2 tranches. A 2014 tranche will pay 2.0% over DI and the 2016 tranche will pay a fixed rate of 9.5%, according to the prospectus. Proceeds will be used to pay down debt. Santander is managing the sale rated A+ on a national scale.
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Jamaica Swap Tops 90%
Jamaica’s government says it received submission forms from holders representing more than 90% of the domestic government bonds eligible for its debt exchange. The government also has set 1300 local time February 3 as the new deadline, after announcing a postponement Wednesday to give the island’s financial institutions more time to prepare. In the swap, it is asking holders of JAD700bn ($7.86bn) in some 350 different bonds to exchange for new securities with longer tenors, on a 1-for-1 basis. The expected settlement date for the transaction remains February 16, the government says. Citi is managing the process. February 3 is also the date Jamaica’s request for a $1.3bn 27-month IMF standby agreement will go to the multilateral’s executive board.
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Futures Group Bans Bajan Trader
The National Futures Association (NFA) has permanently barred Kingz Capital Management Corporation (KCM) from membership. KCM was registered as a commodity trading advisor and commodity pool operator in Barbados, though its senior managers were based in Canada. NFA also banned David Krywenky, the firm’s principal, for 3 years. The decision, issued by an NFA panel, is based on a complaint filed last September and a settlement offer submitted by KCM and Krywenky. The complaint charged KCM and Krywenky with failure to uphold high ethical standards and failure to supervise, says the NFA. It also alleges cheating, defrauding or deceiving another person, or attempting to do so. Kingz Capital Investments purportedly traded forex, starting in late 2008, when it claimed $330m in assets, dropping to $284m by last June, says the NFA. Following a 3-year ban, if Krywenky applies for associate NFA membership with any NFA member, he must pay a $25,000 fine. NFA is an independent provider of regulatory programs for futures markets.
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StanChart Names Private Banking Head
Standard Chartered has named John Leto president and CEO of its Americas private banking unit, it says. Leto is based in Miami and reports to David Stileman, CEO Americas and Marianne Hay, head of private banking for Europe, Americas and MENA. He joins from a startup private bank Alpha Capital Financial, where he was a partner, after holding different positions at Citi, including Chief administrative officer at its private bank. Leto replaces Diego Folino, who will move to another role at Standard Chartered that has not been announced yet.
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Colombia Rates to Stay Put
Colombia’s central bank is expected to keep its rate on hold at 3.50% today. Bank of America Merrill Lynch expects the bank to stick at this level until June, when it forecasts a 50bp hike to 4.00%. Morgan Stanley meanwhile expects 200bp of interest rate hikes in H2, with the central bank tightening to 5.50% by December. “With inflation at the lowest point since late 1955 and ample slack in the economy there is little in the way of inflation pressure in the near term,” says Morgan Stanley. “But with an aggressive new target – 3% with a 1% tolerance band – and with real rates already in negative territory for the first time in recent history, the central bank is unlikely to cut rates either,” it adds.
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Banco Bice Places Bonds
Chile’s Banco Bice has sold UF3m ($124m) in 5-year local bonds with a 3.00% coupon to yield 3.23%, a spread of 82bp over the 5-year central bank bonds. The bank managed the AA rated issue itself. Banco Bice, founded in 1979, has about $500m in assets, according to information from the local bank regulator.
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BESI Brazil Preps Bigger Bond Sequel
BES Investimento do Brasil, an 80%-owned subsidiary of Portugal’s Banco Espirito Santo, is preparing to pitch investors a 5-year bond. Following a $150m debut last year, the bank is heard targeting a larger size, perhaps $350m, as it looks to grow its investor base. A team targeting institutional investors will begin Monday in LA, visit Boston Tuesday and finish in New York Wednesday, according to bankers managing the sale. A second group will focus on retail and begin Monday in Miami, visit London and Switzerland before finishing Thursday in Lisbon. Deutsche Bank, Espirito Santo and Standard Bank are managing the 144a sale. BESI Brasil is rated Baa2/BBB minus. The bank raised $150m from the sale of 2012 bonds at a 6.0% yield in May 2009. Bradesco owns 20% of BESI Brasil.
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Pine Sets Tier 2 Guidance
Brazil’s Banco Pine has set price guidance of 8.875% area for a new 7-year Tier 2 bond, expected to price late today or Monday. The Ba3 transaction is expected to be at least $150m in size, and follows an Asian, US and European road show. HSBC, Credit Suisse and Banco Espirito Santo are leading the sale. Interest in subordinated bank bonds is picking up, with a Baa2 rated $750m 10-year Tier 2 from Banco Votorantim that priced to yield 7.375% last week. Pine’s last dollar bond was a 7.375% coupon $150m 2-year deal in June 2008.
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JBS Sticks to US IPO Plans: Reports
JBS, the Brazilian meatpacker, plans to continue with plans to issue shares in US, though the timing of the deal has been delayed, CEO Joesley Batista told local news outlets in Sao Paulo Monday. The executive says the offering, expected to be worth $2bn, won’t occur until after the company release Q4 results and may occur during H1. The original timeline involved a placement in January 2010. JPMorgan advised JBS in its acquisition of Bertin in Brazil and Rothschild and Rabo advised it on its US acquisition of Pilgrim’s Pride in Q4 2010. JBS is raising equity in the US through an IPO and in Brazil through a private share placement to help finance the deals and capitalize the companies. JBS also announced Thursday it has launched a tender offer for its 9.375% 2011 bonds, of which there are $275m outstanding. The company’s string of acquisitions last year triggered change of control clauses, forcing JBS to buy back the bonds. The buyback period goes through March 1. JBS was unavailable for comment.