Brazilian homebuilder Even Construtora has finalized the sale of BRL250m in debentures in the local market, according to the CVM. A BRL125m 2015 tranche pays the DI plus 1.95%, inside of a 2.10% target listed in initial filings. A BRL125m 2016 portion pays the DI plus 2.20%, inside of a 2.30% target. The developer plans to buy land and refinance debt with the proceeds. Itau and Santander managed the sale, rated A2/A minus.
Category: Corporate & Sovereign Strategy
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CentAm, DomRep to Get $2bn from IDB
The IDB says it expects to disburse $2bn in financing for Central America and the Dominican Republic this year to invest in citizen security, infrastructure, social protection networks, natural disasters and climate change and public finances. This is slightly below the amount disbursed in 2010, which totaled $2.1bn, but is a 30% increase from 2009.
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Mexico Seen Keeping Rate Unchanged
Mexico’s central bank is expected to keep its rate unchanged at 4.50% today. “While the central bank may warn of rising food-related risks to inflation – partly related to the damaged crops caused by freezing weather in early February – the overall tone of [its] statement should continue to show a central bank that is in no hurry to hike,” Morgan Stanley says. The firm believes the rate will stay at 4.50% for the rest of the year. Nomura agrees, saying that “with inflation within the target band of 2%-4% and the output gap expected to be barely positive in H2 2011, we believe Banxico will keep the policy rate unchanged this year.”
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Brazil Hikes Rate As Expected
Brazil’s central bank tightened its rate by 50bp as expected, bringing it to 11.75%. “We expect another 100bps in rate tightening through year-end, taking the rate to 12.75% by end-2011,” says Bulltick. Morgan Stanley thinks the rate will end the year at 12.50%.
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DomRep Hikes Rate, Replaces FinMin
The Dominican Republic’s central bank tightened its rate by 100bp, bringing it to 6.0%, its highest level since February 2009. The central bank cites headline inflation, which at 6.2% in January is running above the bank’s 5-6% target for this year. “We believe the pace of future rate hikes will likely decline as annual inflation falls within the official target range,” says JPMorgan. Nomura says this is a good policy move to control aggregate demand, which is growing at a fast pace. Meanwhile, the country’s finance minister, Vicente Bengoa, has been replaced with Daniel Toribio, the general manager of state-owned Banco de Reservas and minister of finance for the first term of president Leonel Fernandez. “We view this change positively, as this is likely to result in increased coordination within the economic cabinet and improved policymaking,” says Nomura analyst Boris Segura. “The departing minister of finance had a difficult working relationship inside President Fernandez’s economic team,” Segura says. “Also, Bengoa explicitly rejected approaching the IMF until Fernandez made the decision to engage it in Q3 2009,” he adds. Bengoa had been finance minister since 2004.
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Invepar Ratings Under Review: Moody’s
Moody’s has placed the Ba2 ratings of Invepar’s BRL450m senior unsecured debentures under review for possible downgrade. The corporate family rating of Ba3 was also placed on review for possible downgrade. The review was prompted by Moody’s perception of increased credit risk at the subsidiary guarantor, Linha Amarela, as a result of additional investment requirements through 2012. “In spite of long-term compensations provided by the amendment of its concession agreement, the unexpected increase in Linha Amarela’s leverage creates additional near-term pressure on the group’s already high consolidated leverage and weak liquidity position,” Moody’s says.
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Morgan Stanley Appoints Mexico President
Morgan Stanley has appointed Jaime Martinez-Negrete as president of Morgan Stanley Mexico and country head. He was previously co-head of Mexico investment banking, as of July 2008. Prior to that he was at Credit Suisse, on the Mexican investment banking team.
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Satmex Signs Exit Financing
Mexico’s Satmex says it has entered into a commitment letter with Jefferies for $325m in exit financing to help fund a payout to bondholders in a restructuring. The bankruptcy reorganization plan, accepted by more than 66% of holders of the satellite operator’s 2013 bonds last month, will also count on a $96.25m equity rights offering to the bondholders. In the prepackaged reorganization plan to be filed in a US bankruptcy court, Satmex plans to pay holders of its 2011 bonds at par plus accrued interest. Also, holders of the 2013s would receive their pro rata share of a pool of equity interests in the indirect parent of reorganized Satmex and the equity rights, but only to the extent that holders have exercised their primary rights. Alternatively, 2013 holders may elect to receive a cash payment of 38 cents per dollar. A Satmex official declines to comment on the nature or timing of the debt financing or on the timing of the equity transaction. Proceeds of the exit financing and rights offering will also be used to fund completion of Satmex 8, a satellite scheduled to be launched in 2012 to replace the Satmex 5 satellite. Lazard is advising Satmex. Bondholders rejected a takeover bid for the troubled communications company worth up to $375m last year from EchoStar and MVS Comunicaciones.
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Braskem Names CEO of US Biz
Braskem has named Luiz de Mendonca CEO of Braskem America, it says. He replaces Carlos Fadigas, who was CEO of the Brazilian petrochemical producer’s US unit until he was named CEO of Braskem in December. Mendonca had been CEO of petrochemical company Quattor since its 2010 acquisition by Braskem, and prior to that had been vp of Braskem’s polymers unit and basic petrochemicals unit. In addition to his role as Braskem America CEO, Mendonca will oversee Braskem’s international expansion projects, including those already in place in Mexico, Venezuela and Peru as well as the company’s green chemical business. Braskem acquired Sunoco Chemicals for $350m in 2008 and renamed it Braskem America.
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Brazil Expected to Tighten Rate
Brazil’s central bank is expected by the market to hike its rate, known as Selic, by 50bp to 11.75% today. Bulltick agrees with market consensus and expects year-end Selic rate to end at 12.75%. Morgan Stanley also agrees there will be a 50bp hike, but thinks the rate will end the year at 12.50%.