Brazilian miner MMX has withdrawn plans for a primary share offering filed with the CVM September 5. Instead, it plans to take out a $400m standby credit facility, after receiving offers for separate credit lines from two banks. According to Bradesco analyst Raphael Biderman, this is a good move by management as the company has $75m in net cash currently on their balance sheet. Bradesco reiterated a buy recommendation following the news.
Category: Bonds
Posted inDaily Brief
US Agro Operation to Purchase Brazil Ethanol Plant
New York-based fertilizer and oilseeds producer Bunge has signed an agreement to acquire the Agroindustrial Santa Juliana sugarcane mill and ethanol production plant from the Tenorio Group. The mill in the state of Minas Gerais came online last year and has a 1.6m metric ton per year capacity, which Bunge plans to expand to 4.0m. The value of the transaction was not disclosed.
Posted inDaily Brief
CVM Boosts Ultrapar’s Ipiranga Offers
Brazil’s Comissão de Valores Mobiliários has moved to increase the price Ultrapar Participações will offer for Petroleo Ipiranga shares it doesn’t own by 10.9% to BRL64.43 per share. The decision, subject to the approval of the CVM’s board, was taken in response to minority shareholders’ plea that there was a double discount on the CBPI valuation calculation, preventing them from accessing part of the premium paid to the controlling shareholders. The CVM also confirmed the registration for the public acquisition offerings for subsidiaries Distribuidora de Produtos de Petroleo Ipiranga and Refinaria de Petróleo Ipiranga shares at BRL112.07 and BRL106.28, respectively, the same values from the Ipiranga deal announcement. Ultrapar, Petrobras and Braskem agreed in March to buy Ipiranga group, which includes the oil company, for $4bn. Ultrapar is required under Brazilian law to make a follow-on offer to minority shareholders.
Posted inDaily Brief
IDB Eyes FARAC Participation
The IDB is among the banks considering participating in the FARAC transaction. Bankers close to the process say the multilateral has received approval for a participation worth up to $400m, but that it is not yet clear which part of the deal will it will target. One option is participation in the syndicated loan and another includes providing a guarantee for the eventual bond takeouts.
Posted inDaily Brief
Jamaica Opposition Surprises with Election Win
The Jamaica Labour Party’s Bruce Golding appeared set for a surprise victory in a general election that was apparently swayed by the government’s response to the most recent hurricane. Bonds were supported by a technical bid following a weekend maturity which is apparently being allocated back to the high yield credit. Locals have apparently accumulated dollars and there is pent up demand following an election induced investment hiatus. “The technicals in Jamaican bonds are in very good shape given that the 2007 maturity has just been paid,” Carl Ross, head of emerging markets research at Bear Stearns, tells LatinFinance. Audley Shaw is expected to take over at the finance ministry, a challenging job given the sovereign’s 130% of debt to GDP ratio. “Audley Shaw is very much in touch with the issues,” says Ross. “We believe the JLP has no intention of repudiating the debt,” he adds. Once the JLP forms a government, it has several pressing challenges. Stimulating growth is urgent. Bear has an underperform on the debt but is reviewing that.
Posted inDaily Brief
IDB Going Native
The IDB’s private sector arm, headed by Hans Schulz, is looking to build up a domestic presence in Latin America, and hopes to have a third of its staff based locally by the end of next year, Schulz tells LatinFinance. “We want to be present in 10 countries in the region,” says Schulz. He adds that he would like to see up to 25 of his staff present in the region at any given time. Working with corporate borrowers, a new mandate for the IDB, will demand a larger presence in the region, says Schulz.
Posted inMagazine
IDB Pushes Private Sector
Repositioning the IDB to better address private sector needs is underway. IDB president Luis Alberto Moreno must produce results quickly to validate his vision.
Posted inDaily Brief
Argentina Joins CAF
CAF has signed up Argentina as a member with a $643m participation. It is first Latin, non-Andean nation to join the multilateral, following a recent change in the rules that allows such members. At the signing, CAF also agreed a $300m loan to partially fund the Interconexión Eléctrica Rincón Santa María-Rodríguez project. The deal is the seventh CAF has signed in the country. Full membership is expected to boost CAF financing to Argentina.
Posted inDaily Brief
IDB Taps BofA’s Weissman for Corporate Finance
Warren Weissman, head of LatAm loan syndications at Banc of America Securities, is moving to the IDB to head the Corporate Finance division in the multilateral’s reformed private sector group, headed by Hans Schulz. As division head, Weissman will be responsible for a team of up to nine executives, a number that may grow with local additions in the coming months. He will focus on lending to corporates in the region. The idea is not to compete with commercial banks, but to participate jointly and complement their business in LatAm, Weissman tells LatinFinance. The IDB, currently undergoing a personnel overhaul, is looking to hone in on the private sector and shift away from its historical emphasis on large infrastructure and sovereign deals. Weissman is expected to start the Washington appointment in September.
Posted inDaily Brief
Telefónica Colombia Readies $600m A/B Loan
Telefónica’s Colombian unit is preparing to launch a $600m A/B loan. The IDB will fund $125m in a 7-year A-loan and the remaining $475m will be syndicated out as a 5-year B loan, with ABN AMRO, Santander, Citi and BNP leading. Proceeds are for general capex and working capital, according to people close to the deal. Launch is expected in October.