The IDB has approved a $70m loan for the Dominican Republic so it can enhance its conditional cash transfer program. This loan represents the first of a $300 million multiphase program and has a 25-year term, with an 18-month grace period, and a Libor-based interest rate.
Category: Daily Brief
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BdB Gets Embraport M&A Honors
Banco do Brasil advised Odebrecht on its joint bid with DP World for a majority stake in Empresa Brasileira de Terminais Portuarios (Embraport), according to a person close to the transaction. The deal value has not been disclosed, but some $500m is expected to be spent in a first phase of the project, scheduled to be concluded in 2012 with capacity to handle around 1m TEU and be operated by DP. At full development, Embraport is set to have capacity of more than 1.5m TEU and about 2bn liters of ethanol.
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Chevron Alleges Bribery in Ecuador Suit
Chevron has given authorities in Ecuador and the US video recordings that the US oil major alleges reveal a $3m bribery scheme implicating a judge presiding over an environmental lawsuit. Chevron faces a potential civil liability of up to $27bn if it loses the case over alleged pollution in the Amazon, which has been going on for more than 15 years. Chevron claims to have video evidence incriminating the judge, as well footage of as an individual who claims to be a representative of Ecuador’s ruling political party, Alianza PAIS, seeking $3m in bribes in return for giving environmental remediation contracts to businessmen after a verdict. “After referring the evidence of the scheme to authorities, Chevron executive vice president Charles James said that company lawyers will seek the disqualification of the judge in the case and annulment of his prior rulings,” says Chevron. “Given the highly sensitive nature of this information and our concerns about the rule of law in Ecuador, we felt compelled to put this entire matter into the public domain,” James adds. The videotaped meetings allegedly occurred in May and June.
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Cruzeiro Eyes New USD Bond
Brazil’s Banco Cruzeiro do Sul is readying a $150m 3-year cross-border bond, according to a banker managing the sale, in a transaction likely to come mid-September. The Ba2 rated mid-size payroll lending specialist expects to pay a yield in the 8.50% area. BCP Securities is running the Reg S transaction. In June, Cruzeiro became the first mid-size Brazilian bank to issue in nearly a year, with a $60m sale of 9.00% notes priced to yield 9.75%, also via BCP.
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Patagonia Purchases GMAC Argentina
Argentina’s Banco Patagonia has acquired GMAC Cia. Financiera for $23m in cash, it says in a statement to the local securities’ commission, adding that the transaction will allow it to enter the automobile financing business. GMAC’s Argentina unit has ARP548m in assets and a loan volume of ARP378m. The company does not say if there were financial advisors.
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Brazilian Real Estate Player Plots Local Bond
Brazilian real estate investment company PDG Realty has authorized the sale of up to BRL300m in 2014 debentures. The issuer does not name the bank managing the sale or the price it expects to pay. It also approved a share split, to occur at an unspecified date in the future. PDG sold $276m in convertible 2012 debentures in April in a transaction guaranteed by BNDESPar.
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Brazilian Developer Readies Float
As Brazil’s primary equity comeback delves deeper into small and mid-caps, real estate company Direcional Engenharia has registered to issue an IPO. Direcional has hired Santander to lead and Itau and Morgan Stanley as coordinators, but has not set a date or target volume. It plans to use proceeds to acquire land, develop projects and for working capital. Direcional is based in Minas Gerais state, and operates in the southeast and northern regions of Brazil. In 2008, Direcional sold a 25% stake to Tarpon Investment Group for BRL250m. Brazilian IT outsourcer Tivit is set to test appetite for Brazilian small caps with an $200m-$300m IPO expected in September or October.
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Petrobras Plans Capital Raise
Petrobras stock dropped Monday after the company said it was looking to issue equity amid proposed changes to the regulatory framework for oil and natural gas exploration and production. The Brazilian oil producer is planning an extraordinary general shareholder meeting to approve the capitalization, which may include participation by the state. Romero Juca, the government’s leader in the Senate, says the plan calls for a state capital infusion of about $50bn in Petrobras to boost federal control over the firm, according to wire reports quoting the politician. Petrobras closed 4.48% lower at 37.53 Monday, with sellers reportedly mobilized by uncertainty about the announcement. It follows news that Brazil will introduce a new contracting system, dubbed “shared production,” for oil and natural gas exploration and production in pre-salt areas and places declared strategic by the national energy policy council. Petrobras will keep a minimum 30% stake of areas that are auctioned, and it may also participate in the bidding to increase its ownership.
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Cetip Mute on Jumbo IPO Talk
Brazil’s Cetip declines to comment on speculation it plans to file for an IPO this week. Investors have been expecting an offer from the securities clearing house and depository and other issuers who put off 2007 and 2008 offerings due to the crisis, and Brazilian paper O Estado de Sao Paulo reports Cetip will file this week to raise up to BRL4bn. “Conditions have improved. A deal like this could get done now,” says a Brazilian ECM banker, noting that while it should be a large transaction, reaching BRL4bn might require aggressive valuation. Goldman Sachs is heard among the likely lead banks, according Brazil-focused equity investors based on its leading of the BM&F Bovespa offering. The shops attached to larger domestic banks among Cetip’s ownership structure, including UBS, Itau and Santander, are also favored. If a deal goes through, it would be the region’s second largest of the year, after VisaNet’s BRL8.24bn offer in June. Cetip is LatAm’s largest depository for private fixed-income, reporting net profit of BRL41m on net revenue of BRL89m in 2008. Cetip demutualized 2 years ago and considered a number of options including an IPO, but ended up shelving the plan due to the global crisis. In March, private equity firm Advent International bought a 30% stake in Cetip for BRL360m from local financial-market participants.
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Cemex May Get to B
S&P has revised its credit watch listing on Cemex’s B minus long-term corporate credit rating, to positive from developing, reflecting its refinancing of bank debt. The agency also expects benefits from Cemex completing an Australian asset sale and placing equity. “We now see potential upside, limited to one notch, to B, given our belief that the completion of Australian asset sale and equity issuance are required to cover Cemex’s maturities during the next 2 years,” says S&P. Cemex earlier this month concluded a refinancing of $15bn in bank debt. The Mexican cement producer raised a new facility due 2014 that houses its 2009-2011 maturities that pays Libor plus 450bp. It also privately placed $895m of that total debt package with a group of lenders at a fixed 8.91%.