Banco Trasatlantico saw its rating changed to B from B minus on a national scale, and its outlook changed to stable from negative by Fitch. The ratings change reflects structural changes in its management team and corporate governance, according to the ratings agency. Stabilization of its balance sheet and deposits also contribute to the change.
Category: Corporate & Sovereign Strategy
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Vulcabras Pulls FO
Vulcabras, a Brazilian maker of shoes and sporting goods, has cancelled its registration for a follow-on equity offer, according to the CVM. The owner of brands including Olympikus, Azaleia and Dijean was looking to raise funds for capex and possible acquisitions, and had filed for the transaction in December. It does not indicate the size or timing of the sale, to be composed entirely of primary shares. BTG Pactual was managing. Vulcabras’ preferred shares closed at BRL18.00 Monday. Despite would-be issuers continuing to pile into the Brazilian new issuance pipeline, dropouts have also been increasing. The other resent deals to be pulled – Desenvix and BrasilAgro – were in sectors where deals have seen more difficulty than those more directly tied to consumer discretionary spending. Fellow shoemaker Arezzo, for example, was one of Brazil’s more successful IPOs this year, pricing at the top of its range and trading up to BRL24.80 Monday from a BRL19.00 pricing in January.
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Barclays Credit Analyst Departs
Alex Monroy has left Barclays Capital, where he was a LatAm corporate credit analyst, according to a source at the bank. After leaving earlier this month, he is heard headed to a similar position at Nomura, as the Japanese bank expands its research capabilities in the region. His coverage at Barclays is to be divided up among his teammates. A Nomura official was unable to comment on the matter.
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Barclays Poaches Madan from DB
Veteran EM banker Karan Madan has resigned from Deutsche and will join Barclays in August, according to a Barclays internal memo. The move comes as something of a surprise, as Madan had only joined DB, where he was head of global markets for LatAm, in mid-2009. Barclays is creating a new role for Madan – LatAm regional head and head of LatAm fixed income, currencies and commodities (FICC) trading. He will be responsible for the FICC, equities and investment banking businesses in LatAm. In addition, he will be directly responsible for the LatAm FICC trading business. The new role combines many of responsibilities that former head of LatAm investment banking Carlos Mauleon had before he left earlier this year, and also adds new ones. The hire is designed to help the bank further develop its business platform in the region, according to the memo. Madan’s replacement at Deutsche is not yet clear, say sources at the bank, who note the preference is likely for an internal hire and that his duties have for the moment been assigned to subordinates. Madan was at Merrill for 14 years before moving to Deutsche. Barclays makes the hire following the loss of two Brazil-based fixed-income bankers to Bank of America Merrill Lynch. Roge Rosolini, Barclays’s head of fixed income, currencies and commodities in Brazil, is to co-lead fixed income at BAML. Andre Rizzo will also join BAML from Barclays, and head fixed-income and currency sales in Brazil, according to a source at the bank.
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Mexico’s Tendedora Nemak Upgraded
Mexican car parts manufacturer Tendedora Nemak has been upgraded to BBB from BB+ on a national scale with a stable outlook by Fitch. Nemak’s 2017 bonds, which have a partial guarantee from Bancomext, have been upgraded, to A minus from BBB, also on a national scale. The ratings action is driven by an improvement in the company’s financial situation as a result of an increase in the volume of sales, operating cash flow generation, record EBITDA levels and a decrease in the company’s leverage. Debt-to-EBITDA at the end of Q1 2011 was 3.6x, compared to 3.4x in 2010 and 5.5x in 2009, adds Fitch. EBITDA for 2010 was $364m, which was a 40% increase over EBITDA in 2009. The rating action also takes in to account the company’s growing market share and the recovery of the car manufacturing industry, adds Fitch.
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Standard Chartered Names Americas CEO
Standard Chartered has named Julio Rojas as CEO for the Americas, it says, replacing David Stileman, who becomes Chairman for the Americas. Rojas is based in New York and will report to V. Shankar, CEO of Europe, the Middle East, Africa and the Americas, and is charged with developing and promoting the bank’s strategy in the region. With Standard Chartered since 1988, he was most recently covering financial institutions clients including central banks, sovereigns, commercial banks, investors, multilaterals, microfinance institutions and non-governmental organizations. Stileman will continue to support the bank’s strategic development and client coverage in the Americas, the bank says.
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KSC Mexico Upgraded by S&P
Kansas City Southern de Mexico has been upgraded to BB from BB minus by S&P. The ratings agency cites significant improvement in the credit profile of parent company Kansas City Southern. Credit measures have improved due to debt reduction, earnings improvement, and increased cash flow. KCS has decreased its debt by $337m to $1.6bn as of March 31, 2011 and increased operating income by 55% to $506m, according to the ratings agency. “The company has also taken steps to enhance its liquidity position by securing additional revolver commitments in Mexico and maintaining adequate covenant cushion under its various credit facilities,” says Anita Ogbara, credit analyst at S&P. The ratings agency also expects increased earnings and cash flow in 2011 due to rising volumes, pricing gains, and improved operating efficiency.
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LatAm FDI Grew Fastest in 2010
LatAm and the Caribbean saw the fastest growth in incoming FDI in 2010 of any global region at 40%, according to a study by Comision Economica para America Latina y el Caribe (CEPAL). LatAm and the Caribbean saw $112.6bn in FDI last year. Meanwhile, developed countries saw FDI fall by 7% from 2007 to 2010, according to the report. Cepal says it anticipates the region will continue to see FDI grow by an additional 15%-25% this year. Brazil was the largest single beneficiary last year, seeing FDI increase by 87%, reaching $48.5bn in 2010. Mexico was the second biggest recipient with $17.7bn, followed by Chile with $15.1bn, Peru ($7.3bn), Colombia ($6.8bn) and Argentina ($6.2bn). The US continues to be the largest investor in the region, according to the report, representing 17% of investment, followed by the Netherlands (13%), China (9%), Canada and Spain (both 4%).
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SCP Finally Pursues Debt Agreement
More than 10 years since defaulting on their dollar bonds, Argentina’s Sociedad Comercial del Plata (SCP) has been given court approval to submit an offer to creditors giving them more than 80% of the company, it says in a stock market filing. The holding company founded by the Soldati family, which had a 2004 bankruptcy protection agreement overturned on appeal in 2006, plans to submit two alternatives to holders of what local press reports say is $260m in bonds. A meeting is expected in the next 60 days, where investors could choose to approve one of two options. In the first, investors would get the value of the bond debt in shares, minus a 40% haircut. The second option is a new 8-year peso-denominated bond, also at an amount equal to a 40% haircut, paying interest at 1% stepping up to 5% in the seventh year. The Soldati family now holds 22% of the company, and would be left with less than 5%, according to local press reports. SCP is an entity whose holdings include the Parque de la Costa theme park and train, half of the casino in Tigre and 19% of oil company CGC. It has $700m in debt, including $260m in bonds and the remainder in bank loans, the press reports say. It defaulted in 1999 and filed for bankruptcy in 2000, and then had the bankruptcy approved in 2004 and be overturned in 2006. The bonds trade in the low teens, according to a trader.
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Jungerman Leaves Credit Suisse Brazil
Denis Jungerman is leaving his position as MD in the investment bank at Credit Suisse’s Brazilian office. Credit Suisse does not say who is replacement will be. Luiz Octavio Lopes, director, has taken over utilities, energy, oil & gas; and Daniel Bassan, director, has taken over TMT, real estate and financial sponsors.