After protracted negotiations stretching over the best part of a year, leading steel group Arcelor Mittal has agreed terms with Brazilian securities regulator CVM for its buyout of local shareholders. The regulator announced earlier this year that the Luxembourg-based company had to raise its offer to minority shareholders in brazil in order to close its merger. Last year, Netherlands-based Mittal Steel bought steel company Arcelor Brasil as part of its takeover of rival Luxembourg-based steelmaker Arcelor in a deal worth $37.3 billion. Following the merger, the CVM ruled that Mittal had to offer to buy out minority shareholders of the Brazilian unit. The European company offered 33.3 reais per share, well below the 51 reais per share demanded by shareholders. CVM had initially demanded a price of 47.9 reais per share in February but later accepted an offer from Arcelor Mittal of 11.70 reais per share in cash and 0.3568 of its own A shares, in total worth 51.27 reais a share, according to the company.
Category: Bonds
IDB Approves $400 million Credit For Mexican Toll Roads
The IDB has approved a partial credit package of up to $400 million to help finance the privatization and concession of a four-highway network in Mexico. The credit is intended to help the eventual developers of the infrastructure projects obtain long-term financing via bonds and loans in Mexican pesos at better terms than it would be able to achieve without the guarantee.
CAF Grants $600 Million For Tocoma Project
Caracas-based Andean Development Corporation (CAF) has approved a $600 million loan to part-finance Venezuela’s hydroelectric plant Manuel Piar (Tocoma), situated in the south of the country. Due to be completed by 2014, the facility will have a capacity of 2,160MW. This is the second loan granted by CAF to the project – the first was for $300 million in 2004. The total cost of the project is set at just over $3 billion and is being financed by the state and other “multilateral sources”, according to CAF.
Costa Rica Goes For CAFTA Referendum
President Oscar Arias of Costa Rica has announced that the country will hold a referendum with regard to ratifying CAFTA – the free trade agreement with the U.S. Arias publicly supported CAFTA, which is as yet unratified in Costa Rica, during his presidential campaign, claiming it was the only way to attract foreign investment to the country. However, the trade pact has come under strong criticism in the Central American country by those who fear competition will destroy local production.
EM Fixed Income Funds Return 2.33% In Q1
Emerging market funds had the second best performance of all of the fixed-income funds tracked by Lipper in the first quarter. EM funds returned 2.33%, beating out the 1.15% and 1.09% returned by global income and international income funds. The latter, in fact, was the second worst performer of all of the 32 fund classes tracked by Lipper and the top performer was high yield, which saw a 2.61% return. The average for bond funds over the quarter was a 1.50% gain, Lipper data shows.
Arming for an Ecuador Default
Bondholders should lawyer up, locate the assets and consider a pre-emptive strike against Ecuador in the run up to default. The sovereign is steeling itself for a legal fight. by Kenneth S. Levine*
FMO and IDB Launch Local Currency Fund for Micro Institutions
FMO, the international development bank of the Netherlands, together with the Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB) have signed for a local-currency fund (Locfund) to offer financing to micro and small businesses in Central America and the Caribbean. FMO will finance the new facility through its MASSIF fund, which provides venture capital and loans in local currency to banks in developing countries, so that the can serve local micro and small businesses and consumers more effectively.
EM Fixed Income Funds Tick Higher
Emerging market debt funds posted a 0.19% pick-up in the week ended March 22, bringing the year-to-date gain to 1.41%, according to Lipper. Global and International funds had better performances for the week, with 0.23% and 0.33% returns, but their YTD rise is still almost 40 basis points shy of EM fixed income.
CAF Wraps Up VEB450 Billion Program
CAF has wrapped up a VEB450 billion ($210 million) bond program through Citigroup, with a VEB128 billion issue of 12-year notes. The deal was the third in a series which started in June 2006.
IDB Raises $30 Million In Colombian Pesos
The IDB issued COP65 billion ($30 million) in 10-year bullet bonds Tuesday. The inflation-linked notes priced 20 basis points through TES. Fees for Santander, the sole-lead, were 40 basis points. The transaction will settle on March 29.