Category: Bonds

Citi has consolidated its LatAm loans and DCM team into a single credit markets group led by Mario Espinosa, former head of loans, and Chris Gilfond, former co-head of DCM. They report to Ricardo Braga, head of fixed income, currency and commodities for Latin America, and Atiq-Ur Rehman, head of EM DCM. The group will combine DCM, syndicated loans, and local DCM and offer liability management, private placements, hybrid capital securities and source loan assets for distribution through EM credit trading. Carlos Corona will lead international bonds and loans coverage for Mexico, working with Humberto Cabral on the local DCM side. Brazil will be led by Sandy Severino, Eduardo Cutrim and Hamilton Agle. In the southern cone, Adrian Guzzoni, Juan Cristobal Peralta (Chile) will lead. In Central American and the Caribbean, Blake Haider and Fabian Kiel (Trinidad and Tobago) take charge. Haider will also have responsibility for the Andes, along with Adrian Guzzoni, Rocio Arbelaez (Colombia) and Denis Gray (Peru). Luis Carlos Nuñez is taking on a new role focusing on emerging and middle market companies, sourcing bond opportunities and/or assets for distribution through Citi’s credit derivative loan distribution program. He will also continue to do local market access trades. John Hartzell, former DCM co-head with Gilfond, is now head of LatAm trading.

It may not be the top of the volume league tables, but Credit Suisse is making the most money overall from M&A, DCM and ECM, Dealogic data shows. For the year to mid-May, the Swiss bank has booked almost $104m in disclosed fees. In second place is UBS, which books close to $97m, more than 80% of it from equities. The bulge bracket house with presence across the three sectors that does worst for disclosed fees ($17.2m) is Morgan Stanley. (For full tables of volume and fees, see the June issue of LatinFinance.)

The bank with the most deals is not the most lucrative, at least in M&A and DCM. For example, JPMorgan claims the lion’s share of the LatAm M&A volume, but it is Citi that makes the most money in that sector, Dealogic data for the year to May 15 shows. Likewise, in DCM, ABN AMRO dominates the volume, following its $7.5bn PDVSA bonanza, but the shop that is raking in the biggest fees is also Citi in that sector. Citi has roughly half the volume of ABN’s $8.4bn in proceeds, but three times the revenue of the Dutch bank, at $28m from 25 debt deals, Dealogic data shows. In M&A, it is a similar story, with JPMorgan dominating the flow ($8.7bn in transactions so far), but Citi making the most money ($27m, versus $17m for JPM.) Credit Suisse is second for M&A fees, with $18m, but comes 9th in the volume table, with $3.5bn from 8 deals, Dealogic charts show. The only real correlation is in equities, where UBS comes first for volume ($2.8bn) and also for fees ($81m). Credit Suisse is second in both ($67m from $2.7bn in issues) and Merrill comes third ($35m fees, $1.6bn proceeds.)

Credit Suisse has started coverage of the bonds of Vitro, the Mexican glassmaker that has been a repeat DCM client. It puts an outperform recommendation on the new 2012 and 2017 bonds and assigns a market perform to its 2013 bond due to its call feature. “At a yield of 7.78% (the ’12s) and 8.32% (the ’17s), we believe these bonds offer an attractive yield given our relative assessment of Vitro’s risks and returns, and a particularly attractive yield among Mexican and US HY industrials,” says Credit Suisse. The US comp is Owens-Illinois. “The main risk to our recommendation on Vitro is the potential for an acquisition oriented growth strategy that could lead to higher leverage (though bond covenants allow for a maximum of 3.5x gross leverage),” the shop adds. Challenges for Vitro include high energy costs, exposure to the auto sector and increased competition. Following the recent $1bn issue, which Credit Suisse jointly led, Vitro streamlined its capital structure and eliminated structural subordination of holdco creditors, provided subsidiary guarantees to all its holdco notes, lowered financing costs and extended maturities, and reduced refinancing risk and liquidity constraints.

MBIA veteran Ron Dadina started at Bear Stearns Monday. He has been appointed managing director in the DCM department, reporting to Ajata Mediratta. Bear is building up a niche in construction finance, following its success last year with Cap Cana, a $250m 9.625% of 2013 to build a luxury resort in the DR. Dadina was a director in MBIA’s global corporate structured finance group responsible for global origination, analysis and execution of future flow deals. The financial guarantor did issues with CVRD, Bradesco and Mexico’s Toluca toll road, among other Latin issues.