Brazilian paper and cellulose producer Aracruz has closed its offer to buy back its debt maturing in 2011 and 2012. The bonds to be purchased represent 43.6% of the total debt in the market. The company will buy back a total of $176.4 million of its 2011 bonds and $58 million of its 2012 bonds. The deal is being managed by Citigroup and JP Morgan.
Electricité de France (EDF) has closed the bidding for a stake in its Brazilian unit, Light. EDF has still to say exactly how much of its unit it will sell off. Last year Light posted profits for the first time in six years. Among those interested in bidding were a consortium made up of construction firm Andrade Gutierrez and electricity producer Cemig; the Energia Rio grouping which included UK investment fund Millennium; Patria-Primus bank and GP Investimentos. Goldman Sachs and Citibank are managing the sale.
Ratings agency Moody’s Investors Service has revised its outlook on the foreign currency credit rating of Colombia from negative to stable. Moody’s currently rates the country’s foreign currency bonds Ba2. Last month, ratings agency Standard & Poor’s raised Colombia’s long-term foreign and local currency credit rating outlook, from stable to positive. The improved outlooks are a product of Colombia’s better growth prospects brought about by greater domestic security and renewed confidence in private investment.
Peruvian company Grupo Romero, which has interests in the food, logistics and finance sectors, has agreed to buy the 25% stake of AmBev’ s Peruvian unit for an undisclosed sum. The Brazilian brewer, owned by Belgian company InBev, says the sale to Romero as a strategic partner will give its Peruvian unit local know-how and allow it to grow in the market.
Canadian Scotiabank yesterday, Thursday, completed its acquisition of Peruvian bank Sudamericano when it bought 65% of Sudamericano’s shares for $62.4 million in a block trade on the local stock exchange to give it 100% control of the institution. It also got the nod from Peruvian regulators to take over the country’s third-largest bank, Banco Wiese Sudameris, from Italy’s Banca Intesa for $265 million. Scotiabank plans a merger to create a new bank with 80% held by the Canadian bank and the remaining 20% by Banca Intesa.
In line with market expectations, Brazil’s Central Bank yesterday, Wednesday, cut its benchmark overnight lending rate (Selic) three-quarters of a percentage point to 16.5%. This is the lowest rate in almost a year and a half and is the second month in a row the Bank has made such a large cut in the rate. The government wants to fuel faster growth in the economy, which has stagnated in recent months. GDP growth last year has been estimated at only 2.2%, well behind the 4.9% expansion seen in 2004 and far behind other large economies in the region such as Venezuela and Argentina.
Ecuador has declared a state of emergency in three of its provinces following a widespread strike by contract oil workers. The north-eastern oil-producing provinces of Napo, Sucumbios and Orellana are now under the jurisdiction of the military. Last month, protestors shut down two oil pipelines in the region causing the temporary disruption of oil exports. And in August last year, locals shut down production when they demanded more economic investment from central government and foreign investors operating in the zone. State-owned Petroecuador saw foreign earnings hit by the general strike.
UK and Hong Kong-based financial giant HSBC has made a formal application to Peru’s banking superintendency to set up operations in that country. It is thought the bank may be up and running by August this year. Peru currently has 12 banks and the government is open to increasing competition. HSBC had expressed an interest last year in entering Peru’s financial market as part of a move to expand its overall presence in the region. HSBC already operates in Argentina, Brazil and Mexico. Last week it agreed to buy the assets of Lloyds TSB in Paraguay for $15 million.
The Inter-American Development Bank (IADB) is planning to launch a $1 billion, five-year bond issue. The bonds, which mature in April 2011, are expected to have a spread of 30 points over comparable US treasuries. Credit Suisse and JP Morgan will manage the offering.
Brazil state-owned oil producer Petrobras is to make a public offering of its shares via the Buenos Aires Stock Exchange, probably in the last week of March. It will be the first foreign company to seek a local listing on the exchange since the country’s financial meltdown in 2001. According to Petrobras, it has been seeking to issue shares since it acquired local energy company Perez Companc in August 2002. Further details of the offering are due to be published on Friday.