Argentina is set to begin accepting today five series of Prestamos Garantizados (PG) guaranteed loans and the Boden 2014, as an added part of a debt exchange process launched last week designed to reduce short-term liabilities. The government is offering new Bonar 2014s paying Badlar plus 275bp for the old bonds – which include the RA08, GL09 fixed, GL09 floating GL 12 fixed and GL 12 floating PG. Investors may summit these and the PRE9, PR12 bonds and 08 PG tendered last week until Monday. Results will be announced September 10.
Category: Daily Brief
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Marfrig Gets $100m Pre-Export Loan
Brazil’s Marfrig has obtained a $100m 5-year pre-export loan with a 3-year grace period from Credit Suisse. Marfrig does not disclose the interest rate, but an IR official says it is in line with the borrower’s average, which is 7.69% for foreign-currency borrowing, according to a 2Q report. The funding is the latest in a series of loans the meatpacker has taken out in 2008 as it looks to shore up its balance sheet in what has been a troubling 14 months for Brazilian beef exporters. Marfig’s recent borrowings include a BRL200m credit line from Banco do Brasil, a BRL250m loan from Banco do Brasil, and a $75m facility from Bradesco. It says the current facility will help improve its profile and extend short-term debt.
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Brazilian Educator Raises BRL388m
Brazilian educational services company Kroton Educacional has raised BRL388m through private share placements. Existing shareholders subscribed 115m ordinary and 101m preferred units, adding BRL367m to the company’s equity capital structure and putting BRL21m into a special capital reserve. Kroton closed Thursday at BRL17.68.
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Gavea and Arsenal Unite Wealth Management
Brazil shops Gavea and Arsenal have merged their wealth management businesses, creating a new company called Gavea Arsenal Gestao de Patrimonio. Gavea partner Marcelo Stallone, tells LatinFinance that the new company, which will have $2.4bn in assets under management, will be among the largest independent wealth management shops in Brazil. “There are only a handful of independent wealth management groups in the country, probably about 10, but it would be fair to say we are among the top three,” he explains, adding that usually wealth management groups are tied to banks. He does not say what stake Gavea would hold in the new company. Arminio Fraga, the founder of Gavea, will lead the company with Stallone and Arsenal partner Fernando Barrozo do Amaral. Arsenal’s M&A and restructuring area, as well as Gavea’s hedge funds and illiquid strategies businesses are not part of this merger and will continue to operate independently.
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Cyrela Joins Brazil Developer Cash Grab
Cyrela Brazil Realty plans to sell BRL350m in 2014 debentures through Bradesco at DI plus 0.81%. Cyrela approved the amount last month, without selecting the type of debt transaction it would do. It now joins a line of compatriots raising funds to fuel expansion plans, much of it driven by demand stemming from the government’s Minha Casa Minha Vida program. PDG plans to sell BRL750m-BRL850m in new shares and up to BRL300m in bonds, while Rossi Residencial plans to sell BRL500m-BRL600m in equity.
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Argie Issuers Pull/Postpone USD Bonds
Argentine investors hoping to pick up dollar-denominate fixed income assets will have to wait a bit longer, with the Province of Cordoba facing delays and Aluminum maker Aluar deciding to pull a deal. The province of Cordoba plans to continue marketing a $150m USD-denominated bond following regulatory approval, according to a manager on the deal, which is expected this month. It had been expecting to issue this week. The province is offering $150m in 12% 2017 notes denominated in USD but payable in ARP at market exchange rates, through Banco de Cordoba. Meanwhile Aluar has done an about face, and cancelled recently announced plans to issue $50m in 2014 bonds on the domestic market, it says in a regulatory filing.
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BBVA Expects Emcali Workout Nod
BBVA expects the Colombian government to approve today its proposal to restructure highly indebted government-owned utility Emcali, Andres O’Byrne, the banker on the deal, tells LatinFinance. The bank recommends a spin-off of Emcali’s telecommunications unit and bringing strategic partner to capitalize up to 49% of the new company, O‘Byrne says. It is also proposing that energy unit Termoemcali be capitalized by a strategic partner who could end up with a stake of over 51%, he explains. A decision was originally expected on August 30, according to Superservicios, Colombia’s public services regulator. “After the strategies are approved we will begin pre-qualifying potential investors. We should conclude a deal in four months after the strategy is approved,” O’Byrne says. Emcali has more than COP600bn in debt.
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Sponsors Wind up Wind Financings
Renewable energy sponsors EDFEN and Mesoamerica Globeleq are gunning for a combined $470m in multilateral financing by year-end to build 2 separate turbines in Mexico and Honduras. In the first case, EDFEN, the renewables arm of France’s EDF, is seeking $200m from US Exim Bank, the IDB and the IFC to build at 68MW generator called La Ventosa in Mexico. Wal-Mart de Mexico will be purchasing the power generated by the unit. The funds are heard coming at 10-years or longer, says an executive close to the process, while pricing on the facility is still being negotiated. Meanwhile, Mesoamerica Globeleq, is seeking $270m in similarly long-dated funds for its Cerro Hula project in Tegucigalpa. US Exim is solely leading that transaction. The offtaker in this case is ENEE, the national energy board. “Financing is being done with [multilaterals] because of what’s going on in the commercial bank market,” says a banker eyeing the deals. Long-dated tenors are today nearly impossible for exotic project financings. Multilaterals, meanwhile, can dish out funds for these projects at below market rates thanks to a lower cost of funds and the developmental agenda. Closings are expected by year-end, says the banker. US Exim has hired NordLB to advise it on the transactions.
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HSBC Upgrades Cosan Stock
HSBC’s equity analysts have upgraded Cosan’s stock to overweight from neutral as the company diversifies aggressively beyond the sugar and ethanol arena into other segments such as fuel distribution, energy generation, logistics, and agricultural real estate. The shop has increased Cosan’s CZZ target price to $11.00 from $4.50, and its CSAN3 stock to BRL27.50 from BRL13.50. “We view Cosan’s diversification and growth strategy positively, and we believe that Cosan is becoming a better-balanced and more-efficient entity, with vertical integration providing advantages that its competitors will be hard pressed to replicate in the short term,” the shop says. CSAN3 shares closed down 0.8% at BRL20.65 and CZZ dropped 0.7% to $7.65 September 2.
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Brazil Rates Stay Untouched
Brazil’s central bank says its board unanimously decided to keep the Selic rate at 8.75%, in line with market expectations. “We believe that this decision is consistent with our current call for Selic, which states that the easing cycle is over and most likely Copom will seek to maintain Selic unchanged for the next year or so,” says Goldman Sachs. It expects the rate to stay at this level until Q3 2010. RBC, whose forecast was in line with expectations, also expected the bank to signal a pause in cuts. Brazil’s central bank has reduced the Selic rate by 500bp so far this year.