Voting has opened for LatinFinance’s 2013 Best Corporates in the Capital Markets Awards. These awards celebrate the companies in Latin America and the Caribbean that have made the most impressive use of the debt and equity markets over the past 12 months. Market opinion is an important component in the three-part selection process, so have your say now at https://www.research.net/s/LatinFinanceBestCorporates2013. Votes are strictly confidential. Full details of the selection process can be found here: http://www.latinfinance.com/stub.aspx?Stubid=21779. The winners will be announced in LatinFinance’s July edition.
Category: Corporate & Sovereign Strategy
Posted inDaily Brief
DCM off 2012 Pace: Dealogic
LatAm DCM issuers raised $38.5bn in 1Q 2013, according to Dealogic, a 29% drop from 1Q 2012 and the lowest first quarter volume since 2010. The cross-border total of $28bn was also down, by 26%. The average deal size was $335m. High-yield sales totaled $11.4bn in the quarter, up from $6.1bn in 1Q 2012. Many of the usual investment-grade sovereigns and quasi-sovereign issuers, however, have been a notable absence. Petrobras – with a $7bn deal last year and a $6bn sale in 2012 – is a regular 1Q volume booster that has opted to wait this year. The domestic markets accounted for $10.5bn, compared to $10.4bn in 1Q 2012, and accounted for 27% of the regional total, up from 19% the year before. JPMorgan leads the league tables, with $5.08bn from 20 transactions, followed by Citi ($4.93bn from 32) and HSBC ($2.96bn from 18). The US bank also leads when only cross border deals are counted, with $4.74bn from 17 transactions, ahead of Citi ($3.79bn from 19) and Bank of America Merrill Lynch ($2.56bn from 15).
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S&P Cuts OGX
S&P has cut Brazil’s OGX’s credit rating to B minus from B, citing poor production expectations and cash concerns. In the latest bit of bad news for Eike Batista companies, S&P expects the oil producer may burn through funds this year and have to find more for 2014. “Although the company does not have any significant debt maturity until 2018 when the $2.6bn bond is due, we believe that OGX will consume almost all of its $1.6bn in cash, as of December 2012, to fund capital expenditures and interest payments during 2013,” the agency says. The outlook is negative. OGX 2018 bonds traded down slightly Thursday, finishing at 79-80, according to a trader.
Posted inDaily Brief
Fitch Lowers Gol
Fitch has downgraded Gol’s rating to B minus from B+, it says, based on a weakening credit profile. The agency notes that the Brazilian airline has experienced decreasing cash flows in the three years through December 2012, and is facing increasing fuel costs, currency depreciation, and rising competition. Gol’s Ebitdar margin fell to 3.2% in 2012, from 9.0% in 2011 and 22.0% in 2010. The outlook is negative. S&P recently placed Gol’s B credit rating on negative watch, citing poor performance.
Posted inDaily Brief
M&A off to Slow Start: Dealogic
Latin America-targeted M&A volume was $18.2bn in 1Q, according to Dealogic, representing the lowest first quarter since 2005. The total, from 309 deals, was down 41% from 1Q 2012. The LatAm share comes out of a $690bn global total that was up 18% from 1Q 2012. Mexico was the most targeted nation with $6.1bn, followed by Brazil with $5.1bn. Goldman Sachs leads the league tables, booking $4.40bn from five deals, followed by Bank of America Merrill Lynch ($4.90bn from two) and JPMorgan ($3.75bn from six).
Posted inDaily Brief
Moody’s Reviews Bermuda for Downgrade
Rising government debt and continued recession conditions for Bermuda’s economy have led Moody’s to place its Aa2 rating on review for downgrade, the agency says. “The review for possible downgrade is prompted by the upward trend in government debt that has occurred since 2008, with the ratio of government debt to GDP rising from a low of 5.9% at the end of the 2007-08 fiscal year to an estimated 28.1% at the end of 2012-13,” it says. Budget projections indicate the ratio is headed to more than 30%. S&P also recently revised its outlook on Bermuda’s AA minus credit rating to negative from stable.
Posted inDaily Brief
Isagen Gets Third of Three I-Grade Marks
Fitch has raised Isagen’s credit ratings to BBB minus from BB+, it says, giving the Colombian generator three investment grade marks. The move follows financial and leverage improvements during 2012, with the agency expecting a similar trajectory this year. Fitch also highlights anticipated cash flows from the 820-megawatt Sogamoso hydroelectric project, which is set to be finished in 2014. Isagen also has “strong liquidity with committed credit lines of $472m to fund the remaining part of the capital expenditure program.” The outlook is stable. Moody’s has Isagen at Baa3, and S&P at BBB minus.
Posted inDaily Brief
LatAm ECM up in 1Q: Dealogic
Latin American ECM volume was up in 1Q 2013, to $10.6bn, according to Dealogic, with Credit Suisse capitalizing on several Mexican deals to lead the league tables. The 1Q volume, coming through 25 deals, represents a 167% increase from the $4.0bn done in 1Q 2012 and up 27% on the $8.3bn raised in 4Q 2012. Mexico was the region’s leading issuing nation, with $4.4bn from six deals, its biggest start to the year on record. Chile’s Enersis accounts for the quarter’s largest deal, wrapping up its $6.0bn rights offer March 28. Boosted by roles on five Mexican deals, Credit Suisse tops the league tables, with $2.02bn from 11 deals. It is followed by Santander, with $1.23bn from five deals, and BTG Pactual, with $1.23bn from nine.
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Brokerage CEO Steps Down
Francisco Ossa has stepped down from his role as CEO of Merrill Lynch Corredores de Bolsa in Chile, the brokerage says. He has held the position since July 2008, and is replaced by Max Cuenca.
Posted inDaily Brief
S&P Negative on Gol
S&P has placed Gol’s B credit rating on negative watch, is says, based on the Brazilian airline’s poor performance. “Gol’s financial risk profile may not recover as previously expected because of its weaker performance and resulting negative cash flow generation, which we now expect to continue at least throughout the first half of 2013,” the agency says. The carrier has not cut capacity enough to offset higher fuel prices, and continues to lose market share. Liquidity and cash reserves should be enough to mitigate refinancing risks in the short term, S&P says, though it expects Gol’s negative cash flows to drain reserves in the long term, absent positive liquidity events. The planned IPO of the Smiles frequent flier program, expected as soon as this month, could be one such positive event.