The IMF says Haiti needs a major international aid plan and has pledged an initial $100m interest free as emergency funding, while also urging donors to grant additional debt relief. “My belief is that Haiti – which has been incredibly hit by different things – the food and fuel prices crisis, then the hurricane, then the earthquake – needs something that is big,” says the fund’s MD, Dominique Strauss-Kahn. “Not only a piecemeal approach, but something which is much bigger to deal with the reconstruction of the country: some kind of a Marshall Plan,” he adds in an interview circulated by the IMF. The fund provided a loan to Haiti rather than an outright grant to speed disbursement, since it has no immediate way to make a grant. The IMF and other financial organizations gave about $1.2bn of debt relief to Haiti in June 2009. The World Bank and IDB have in the past 6 months granted almost $900m in additional debt relief. According to Nicolas Eyzaguirre, director of the IMF’s western hemisphere department, most of the island’s productive capacity was located around Port-au-Prince and destroyed in the earthquake. “Banks will reopen shortly but the payments system is not fully operational yet,” he adds, saying also that some transfer houses that receive remittances have reopened. Haitian officials say the quake has killed up to 200,000 people, injured some 250,000, and made 1.5m homeless.
Category: Daily Brief
LatAm Seen Quietly Swelling
After showing resilience during the financial crisis, Moody’s expects GDP in LatAm and the Caribbean to return to growth, although not at the pace seen before the crisis. “Even though LatAm was spared the worst of the economic impact of the crisis, 2009 marked the first overall drop in GDP in many years,” says vice president Gabriel Torres. “2010 will see a return to growth for much of the region, but median growth will be modest even if some countries surprise on the upside,” adds Torres. He expects the region’s GDP to grow less than 3%. Moody’s expects the region to report a contraction around 2% in 2009.
Brazil CB Sees GDP Rebound
Brazil central bank governor Henrique Meirelles says that the country’s economy is on track to expand by 5.0% this year, up from an estimated 0.2% in 2009. “After several decades of low growth and macroeconomic vulnerability, Brazil’s economy is now in its strongest macroeconomic position ever,” Meirelles says.“The sound macroeconomic policies adopted during the last years, including firm regulatory controls, inflation targeting, a floating exchange rate regime and a fiscal policy that enabled the public debt-to-GDP ratio to decline during the period, enabled Brazil to achieve strong economic fundamentals,” he adds. The governor also expects FDI to leap to $45.0bn in 2010 from $25.9bn the previous year. Net debt, meanwhile, is expected to drop to 41.0% of GDP by year-end 2011 from 43.0% at year-end 2010, and 44.1% at the end of 2009.
Independencia Boosts Capital
Mexican microfinance lender Financiera Independencia has announced a subscription of more than 79m shares at MXP10 each via a rights offering. Independencia intends to carry out a second round to subscribe another 5m shares, also at MXP10 each February 5. Proceeds will be used to finance a MXP530m acquisition of peer Financiera Finsol, which was announced in November. Credit Suisse advised on that transaction. The funds will also be used to provide up to MXP300m to strengthen the balance sheets of Finsol and its units, including Finsol Brazil.
Suramericana Divests Exito Stake
Colombia’s Grupo de Inversiones Suramericana has sold the 5.8% stake it held in local retailer Almacenes Exito to Citigroup Global Markets for $210.57m. The deal involves 19.37m shares at COP12,803.68 each, Suramericana says in a regulatory filing. Citi is purchasing the shares through the exercise of a put option from December 2007. Suramericana has been focusing its growth on the insurance and finance sectors and plans to continue divesting assets in other areas. In 2008, for example, it sold 40% of retailer Makro to SHV Holding, its partner in that venture.
Monsanto Plants Brazil ABS
Agricultural company Monsanto has raised BRL180m through a structured finance transaction using Brazil’s FIDC structure. The US-based global producer’s 10-year deal pays DI plus 2%. It is backed by trade receivables originated by the Monsanto do Brasil unit through the sale of seeds and chemicals to Brazilian agribusiness clients. Santander managed the sale, rated AAA on a national scale.
Mexican Brewer Greets Investors
Mexico’s Femsa is meeting the buyside this week in a “non-deal” roadshow, according to investors. BofA-Merrill Lynch and Goldman Sachs are heard managing the meetings, which will apparently include US stops. The brewer has received mixed reviews following the announcement of a sale of its beer unit to Heineken for $7.3bn in stock. Its shares initially fell 13%on the news, before recovering somewhat following analysts’ buy recommendations. Fitch affirmed Femsa’s debt rating, while Moody’s placed it on review for a possible downgrade, citing a rise in debt and loss of revenue. Femsa has not issued a dollar bond since 1999, according to Dealogic.
Repsol Mulls Brazil Upstream Finance
Spain’s Repsol is considering ways to finance investment it must make to develop the substantial Brazilian offshore oil reserves that were recently discovered. It is already deploying EUR500m in capex through 2012 to develop the Carioca field off the coast of Rio alongside Petrobras and Grupo BG, according to a recent presentation. And it is considering similar arrangements with other operators, as well as farm-outs of portions of its other fields, says a company executive. Repsol has also been cited by bankers as a candidate to list shares in Brazil to help finance growth. Investors and sellsiders agree it would make a strong candidate for the BDR market, given its scale and the significant amount of investment it can make in the country in coming years. “It’s still premature to talk about an IPO,” says the executive, who does not deny the company has considered such a move. Elsewhere in LatAm, Repsol continues to seek strategic alternatives for its stake in Argentina-based Repsol YPF, the $17bn market cap company in which it holds an 84% stake. Plans for a $4bn 2008 IPO were shelved as market conditions for Argentine issuers became difficult and its local partners – the Argentine Eskenazi family, which owns a 15% stake and an option to purchase another 10% – are working with Repsol to find a buyer. “We want to sell down to around 55% or so,” says the company executive, who emphasizes Repsol’s interest in maintaining a controlling stake in YPF. Credit Suisse was hired to manage the IPO and is understood to still be involved with YPF.
Brasil Foods Whets Investor Appetite
Brasil Foods has issued yield guidance of 7.625% area for a new $500m 2020 bond, expected to price today. The order book had surpassed $4bn at the end of the day Wednesday, say investors looking at the deal. Itau, JPMorgan and Santander are running the sale for the BB+/Ba1 rated protein exporter, formed from last year’s merger of Perdigao and Sadia. A 7.625% yield would offer “significant upside” to buyers, RBS says in a report, spotting the curve extension from Sadia’s existing 2017 – now trading to yield around 7.0% – at 25bp-50bp. The apparent investor appetite is seen as a positive sign for other high-yield issuers in Latin meat sector, including Brazilian beef producer Minerva, whose $250m 2020 is expected by the end of the week.
Standard Closes on Brazil’s Link
South Africa-based Standard Bank is pursuing Brazilian cash and derivatives broker Link Investimentos to bolster coverage of local and international clients, say executives close to the process. The bank also aims to establish a fully domestic sales and trading operation on the ground in Brazil. Rumors of talks between Standard and a small group of local brokers including Link surfaced last year, but both sides denied that conversations were happening. However, Norberto Giangrande, founding partner at Link, tells LatinFinance talks are being held with Standard about a potential deal. Standard’s Brazil chief Fabio Solferini notes the bank is actively pursuing a brokerage. However, he stops short of naming targets, though he does not deny discussions with Link. Giangrande says Link has received several overtures, and his brokerage is also meeting other potential suitors. A Sao Paulo-based executive familiar with the transaction but away from the 2 parties expects a deal between Standard and Link to be announced shortly. “We think having a global presence is very important,” says Giangrande, noting he has recently visited clients in New York, London and Asia who are interested in trading Brazil. Giangrande also claims his shop has gotten a head start in covering largely US-based high frequency funds trading BM&F contracts. However, he concedes a purely technologically-driven lead over local competitors can be short-lived. Link posted BRL6m in net income in H1 2009 – widely seen as one of the worst periods for markets. On an annualized basis, that is down from the BRL26m posted at Link’s peak in H1 2007, according to Giangrande. He notes that Link’s leading shareholders – of whom he is one – would consider ceding control of the business for the right matchup.