Moody’s has placed Gener’s Baa3 rating under review for possible downgrade reflecting a continued delay in completion of the 270MW Campiche coal-fired plant, which has been on hold for 16 months. The review also reflects the company’s weak retained cashflow-to-debt and free cashflow-to-debt metrics. Gener is Chile’s second largest electricity generation company.
Category: Corporate & Sovereign Strategy
Posted inDaily Brief
Tivit Hires M&A Exec
Brazilian IT company Tivit has hired Andre Guimaraes Frederico as head of M&A and strategic planning. Frederico had previously been financing director at BRQ, another Brazilian IT services company, and had worked at Merrill Lynch and Patria Investimentos. Global PE firm Apax recently bought a 54.25% stake in Tivit from controlling shareholders Votorantim Novos Negocios and Patria Investimentos in May. “My job will be to confront the challenge of helping a technology giant continue to grow through a mix of organic and inorganic growth appropriate for the company,” says Frederico.
Posted inDaily Brief
Vitro Offers Exchange
After months of trying, Mexico’s Vitro has launched an offer to bondholders, this time with the support of its largest creditor, Fintech Advisory, it says. The glassmaker is offering cash and new securities to holders of its $300m in 8.625% of 2012 bonds, $216m in 11.750% of 2013s and $700m in 9.125% of 2017s. The move, which follows past proposals that have been rebuffed by creditors, is intended as a step toward achieving a debt restructuring carried out under Concurso Mercantil, Vitro says. The cash buyback portion offers holders up to $100m at a price of $500-$575 per $1,000 in principal, with the price to be reached through Dutch auction. Alternatively, holders can opt to exchange old bonds for new ones, receiving – for each $1,000 principal – $562 in new 8.000% of 2019 bonds, $66 in 10.500% of 2015 mandatorily convertible debentures, and a cash payment equal to accrued interest. An additional cash payment would come from any funds left in a trust used for a cash buyback that remains after the repurchase is complete. Both offers expire December 1. Vitro says creditors can expect a 68%-73% recovery. Rothschild is Vitro’s financial advisor. Vitro says no dealer manager has been retained for the offers. Vitro defaulted in 2009, as the global recession hurt revenue and the company suffered more than $300m in derivative losses.
Posted inDaily Brief
Banco Mercantil Upgraded
Banco Mercantil do Brasil (BMB) saw its global rating upgraded to B+ from B on improving financials by S&P. It says the Brazilian bank is better positioned to take advantage of favorable conditions in the Brazilian economy. Its national scale rating moves to brBBB from brBBB minus, while its short term global scale rating remains at B, with a stable outlook.
Posted inDaily Brief
Dilma Win Fails to Stir Brazil Markets
With the markets largely having anticipated Dilma Rousseff’s victory, there was limited movement in assets following the Brazilian presidential election Sunday. Brazil’s dollar curve barely moved Monday, say traders, with the 2019 bonds up 0.25 points to 118.85-119.25. The EMBI Brazil index shed 7bp, according to a report from RBC, and the Bovespa gained 1.2%. “Solid gains in congress and among state governorships will ensure Rousseff will have a strong power-base to continue with Lula’s policies, and the expectation is that no material economic policy shift is likely,” RBC says. It expects that whoever is named finance minister will outline some sort of 2011 fiscal adjustment plan to reassure the markets. Likely candidates are Antonio Palocci and Luciano Coutinho, both seen as acceptable by the markets. Rousseff is unlikely to face as favorable external conditions as Lula enjoyed during most of his tenure, RBS notes, while she also lacks Lula’s popularity. Ironically, it says, these factors “could translate into good news, as Rousseff will need to face the challenges to guarantee sustainable growth, which requires a resumption of reforms.”
Posted inMagazine
China Latin America Links Proliferate
Cultural barriers remain, but the China-LatAm relationship is starting to blossom. Both sides hope to convert dialogue into more frequent large transactions.
Posted inMagazine
Best Bank – Venezuela
Mercantil Banco Universal has been expanding its loan portfolio, which has led to year-on-year growth despite a economic contraction and slow liquidity growth in Venezuela.
Posted inMagazine
Infrastructure Investment: The Big Shortfall
As LatAm stares down a growing list of infrastructure needs, builders and governments hope private lenders return. The only certainty is multilateral and state lending.
Posted inMagazine
Best Bank – Panama
Banco General takes top prize for Panama for the second year in a row.
Posted inMagazine
Southern Copper Strikes Back
Southern Copper faces stiff competition in Peru from new and expanding projects. But it is digging deep to keep on top as the country’s leading red metal producer.