ABN AMRO Asset Management, which in April lost its star EM portfolio manager Raphael Kassin to Credit Suisse Asset Management (CSAM), has hired the same fund’s co-portfolio managers Chris Kelly and Tomasz Stadnik to replace Kassin. “The switch wasn’t planned as a switch,” Alan Bridges, senior portfolio manager for rates at ABN AMRO, tells LatinFinance, adding Stadnik and Kelly probably preferred being in charge of a $4bn EM fund at ABN over working under Kassin at CSAM’s $1.5bn EM fund. ABN’s EM fund lost around $4bn, or 50% of its assets under management, in the wake of Kassin’s departure, but the outflows have now stabilized and Bridges believes the fund will begin growing again. Bridges also said the change at the helm marks a significant shift in strategy for the ABN AMRO fund away from LatAm. At the time of Kassin’s departure, the fund was more than 50% invested in Venezuela and Argentina. “We think the LatAm spread convergence is almost entirely played out,” says Bridges. “We think it’s prudent to expand our sources of Alpha.” The fund has already begun to reduce its concentration in LatAm and will look to take advantage of the new managers’ specialties which include corporate credit, Asia, and EM currencies.
Category: Daily Brief
Bancolombia To Tap US Equity
Bancolombia, which is currently in the process of issuing up to $400m worth of preferred shares to existing investors, said it has also begun to offer up to 13m American depository shares, equal to 52m Bancolombia shares. The maximum amount of the ADS will be determined by the difference between $400m and the amount currently being issued to existing local investors. One executive close to the process says estimates for the value of the rights offering, to be concluded on July 9, are at around $150m, which would mean as much as $250m in ADS could be issued, though the figures are preliminary and unofficial. Bancolombia, which already has outstanding ADS in New York, is looking even out its balance sheet following a $400m sale of 2017 bonds in May. UBS and Merrill Lynch have joint books for the ADS.
Busy July For Brazilian IPOs
While the US markets took most of this week off, Brazilian IPO hopefuls were busy updating their filings to go public. On July 18, beef producer Minerva hopes to price 27.6m shares at BRL15.50-BRL21.50 to raise $264m, according to Dealogic. Kroton Educacional, a privately held school operator, unveiled Monday plans to issue 12.3m shares at BRL31.00-BRL39.00 via Morgan Stanley and Merrill Lynch on July 20, to raise $222m. And Banrisul, a state-owned mid-market focused bank, updated Tuesday its filing to go public by establishing a price range of BRL10.50-BRL13.50, bringing the expected value of the deal to $1.245bn. The offering is slated to price July 25, and is being brought by Credit Suisse and UBS Pactual.
HPDA Prices $100m In 10-Year Amortizers
Hidroeléctrica Piedra del Aguila, the Argentine utility, priced Tuesday, following the pre-holiday market close, $100m in 9% 10-year amortizing bonds at 98.557 to yield 9.25%. Pricing came at the wide end of the 9.00%-9.25% price range announced last week, and the total proceeds were dropped from $125m to $100m. The issuer opted for a lower amount of proceeds because the yield came in at the higher end of the range, according to an executive close to the deal. The bonds amortize equally in years 7, 8, 9 and 10. HPDA’s offering concludes a short, thin week for LatAm issuance marked by a slight improvement in market conditions. During the previous week, which was characterized by widening Treasury spreads and spikes in volatility, a number of non-LatAm issuers were pushed out of the market, and timing on offerings from Lupatech, Arcor and HPDA was delayed. Merrill Lynch had sole books for HPDA.
Lupatech Lands $200m In Perpetuals
Brazil’s Lupatech priced $200m in perpetual non-call 5 bonds at par to yield 9.875%, the tight side of the announced 10% area guidance. The Ba3/BB minus notes began trading Tuesday morning, and by mid-day were up to 101, according to one trader. Merrill, which helped underwrite the company’s IPO in May 2006, and Citi were lead banks.
Peru’s Pesquera Diamante Launches $165m Financing
Peruvian fishing company Pesquera Diamante has launched a $165m 5-year loan at Libor plus 350bp, via Citi. The deal is being shopped to MLAs. The proceeds are being used to fund acquisitions, much in the same way another fishing company, Copeinca, used the proceeds of a recent $195m Libor plus 350bp loan, to scoop up smaller competitors. Executives close to Diamante, however, say the use of proceeds is very clearly delineated in this deal, unlike their competitor’s financing, which changed course midstream thanks to a series of new purchases, preventing a full syndication of the loan despite earlier plans to do so.
Slim Is World’s Richest Man
Carlos Slim has risen to the top of the wealth pyramid, claiming the title of the world’s richest man, as his net worth, largely determined by America Movil’s share price, surged to $69bn, according to an estimate published by local Mexican paper Sentido Comun. That tops the former titleholder Bill Gates’ $59bn. So far this week America Móvil ADRs ticked up 3.76%, and have surged 28% in the second quarter.
Swiss Bank Picked For Best in the Region
LatinFinance asked 20 of the region’s biggest users of the capital markets, including major sovereigns and corporates in the oil, mining, steel, homebuilding, airlines, telecom, logistics and agriculture sectors. We also got input from five top investment managers, representing $70 billion in EM assets invested, to gauge quality of service. The plethora of banks in the region should have produced a plurality of results. We certainly culled a range of answers, demonstrating preferences for a host of banks with national and regional specialties. But surprisingly, one institution – Credit Suisse – took the prize in virtually all of the capital markets categories, appearing as the bank of choice in equity underwriting, debt underwriting, sales and trading, and execution. (For full survey, see www.latinfinance.com.)
Cristina Kirchner To Run For President
Cristina Fernández de Kirchner, the wife of Argentine president Nestor Kirchner, will run for president this October, representing the ruling Peronist party. As of today, she is expected to win a presidential bid, possibly in the first round, for which she would need more than 45% of the votes. If she does win, analysts expect few if any major policy changes, and the strategy to maintain a weak peso will likely remain in place, says a Goldman Sachs report. The only significant changes would be cosmetic, according to the report: “Our impression is that Cristina Fernández could bring change in terms of governing style, presiding over a government that may turn out to be less centralized in terms of decision-making than the current one,” it adds.
Fitch Downgrades Cemex
Fitch lowered Cemex’s issuer default rating to BBB-, the lowest notch in the investment grade category, from BBB, because of the increased leverage the company will take on to acquire Australia’s Rinker, for $14.4bn. The new rating will be applied to Cemex, Cemex España, and Rinker, which formerly had an A minus rating. “Cemex plans to fund the acquisition primarily with debt bringing the company’s pro forma EBITDA to 4.6X, versus 2.3X prior to the acquisition,” said Fitch in a release, adding it expects Cemex to bring its leverage down to below 4X by the end of 2007 using its free cashflow.