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%.
Category: Corporate & Sovereign Strategy
Posted inDaily Brief
Fibria Gets Fitch Upgrade
Fibria Celulose saw its rating increased to BB+ from BB by Fitch. The ratings agency also removed the Brazilian pulp and paper producer off Rating Watch Positive and had assigned it a stable outlook. Fitch had placed Fibria on positive watch in December following its announcement of the sale of a 50% stake in Conpacel for BRL1.5bn. Fitch also assigns a BB+ rating to Fibria’s $750m in 2021 bonds.
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Citi Hires DCM Banker
Nicolas Bendersky has joined Citi as a director in its LatAm DCM team. He started yesterday at the US firm, where he will focus on Argentina, Chile, Uruguay, Paraguay, covering both sovereigns and corporates. Bendersky last month left Barclays Capital’s DCM team in New York amid cutbacks across several areas in the bank. His move came the same week as the departure of the head of LatAm DCM, Carlos Mauleon.
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Redecard CEO to Exit
Roberto Medeiros, CEO of Redecard, plans to leave the Brazilian payment processor April 15, the company says. He will be replaced by Claudio Yamaguti, until now a director at Itau-Unibanco, most recently responsible for the bank’s LatAm-wide credit card operations and in Paraguay. Medeiros joined Redecard in 2008. His departure is a strategic decision, an investor relations official says, coming at the end of a cycle in which Redecard grew and gained market share. With the end of exclusivity contracts among Brazilian credit card payments last year, a new phase will be more focused on competition with rival Cielo and other credit card payment processors entering the market.
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Colinversiones Eyes Non-Core Asset Sales
Colombia energy company Colinversiones is seeking to sell its remaining non-core assets for as much as $250m, CEO Juan Guillermo Londono tells LatinFinance. Londono, speaking on the sidelines of the Colombia Day event held at the NYSE, says Colinversiones’ intends to sell 12% of its total assets as non-core. Colinversiones still holds about 2% of insurance conglomerate Suramericana and stakes in real estate assets. In August, Colinversiones sold 3 hotels to New Continents Hotels and The Flagship Hotels, both controlled by Bolivian-born tycoon German Efromovich for about $30m. That divestiture was part of the company’s plan to refocus its business solely on power generation and transmission. “We are receiving expressions of interest from strategics interested in buying industrial safety company Arseg, in which we hold 100%,” London adds. Arseg had total assets of $6m in 2008. Bancolombia is assisting Colinversiones in Arseg’s sale process.
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Brazilian Gadget Maker to Sell Shares
Tec Toy, a Brazilian maker of electronics and videogames, has registered to sell additional shares, according to the CVM. The filing does not state the size or timing of the operation, or identify the managers. Tec Toy’s common shares closed Wednesday at BRL0.50, and preferred at BRL0.60. It has 1.51bn total shares outstanding.
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Rede Ties up Follow-on
Brazilian utility group Rede Energia has completed a BRL175.8m follow-on offering of primary shares left over from last year’s private rights offering, according to the CVM. Rede sold 19.0m ordinary shares and 10.2m preferred shares, at the previously announced price of BRL6.02 each. Each class is relatively illiquid in the markets, with the preferreds last trading Feb 11 at BRL5.88, and the ordinary shares trading Feb 3 at BRL4.25. The shares are left over from a private rights offering in August and September, most of which went to majority shareholder Empresa Eletrica Vale Paranapanema. Planner Corretora managed the process.
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Tendolini to Lead SulAmerica Equity Team
Brazil-based insurance company SulAmerica Investimentos has hired Fernando Tendolini to head a new division dedicated to investing in public equities. Tendolini tells LatinFinance the new fund will look to take stakes of around 5% in Brazilian companies, with an eye toward achieving board representation. At least 60%-70% of the fund will be dedicated to companies listed on the Bovespa, though it could also invest in pre-IPO situations through convertible bonds. The fund will seek to take activist roles in its portfolio companies. Tendolini says the fund will look for undervalued companies where it can improve corporate governance. He declines to comment on how large the fund will be. Marcelo Mello, vice president of SulAmerica Investimentos, says the new unit is being created in response to growing demand from institutional investors and pension funds. Tendolini joins the team after 10 years as head of equity division at Fator.
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BTG Plots Regional IB Expansion
BTG Pactual is planning to move beyond Brazil and could open other LatAm offices this year, the firm’s CEO Andre Esteves tells LatinFinance. “We will continue to grow further in Latin America so you should continue to expect some expansion,” says the banker. He mentions Colombia, Chile and Argentina as possible areas of focus. “Colombia certainly is a good move, but Argentina, Chile also are good candidates . . . maybe as a next step you should expect offices in some of these countries,” says Esteves. Asked whether the new units would come in 2011, he responds, “probably yes.” BTG appears less keen on the second biggest LatAm IB market, Mexico. “Mexico is a great economy but it’s a more plain vanilla investment banking industry,” says Esteves.
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Peru Rate Hike Expected
Market consensus points to Peru’s central bank tightening its rate by 25bp to 3.50% today. Bulltick’s forecast is in line with market consensus, but says that there is risk to the upside as inflation rises. Morgan Stanley, which sees the rate unchanged at 3.25% believes the central bank is not in a hurry to tighten the rate as it wants to avoid feeding currency strength. It sees the rate rising to 4.00% by the end of the year.