Category: Equity

Colombia’s Promigas has placed COP400bn ($197m) in bonds on the domestic market. The gas provider sold COP80bn in 2016 bonds at the IPC inflation rate plus 4.95%, COP150bn in 2019s paying IPC plus 5.40%, and COP170bn in 2024s at IPC plus 5.99%. Proceeds will refinance existing debt. Bancolombia managed the sale, rated AAA on a national scale. It was the issuer’s first placement since 2002.

Brazilian meatpacker Bertin, which recently emerged from a period of financial stress, is in talks with investment banks to issue shares via an IPO, says a company spokeswoman, confirming remarks made by a Bertin director to a Brazilian paper. She adds the company would be targeting a 2010 offering, and not a deal in 2009. Bertin has long been discussing raising equity, and most recently said it was looking to issue in 2007 when Minerva filed a placement via Credit Suisse. That deal took place in July 2007. Bertin also has $350m in outstanding 10.25% of 2016s rated B1/B minus that were trading at around 82 cents on the dollar last week, according to Credit Suisse fixed income research.

BM&FBovespa has entered exclusive talks with the Nasdaq OMX to set up a series of agreements that could eventually contribute to a surge in equity trading on the Brazilian exchange. The discussions, which will last for 60 days, are designed to replicate on the cash equities side an agreement between the CME and the BM&F, sealed in January 2008, for derivatives and futures trading into and out of Brazil, says a person involved in the talks. The first initiative set out to allow users of both the BM&F and the CME to trade seamlessly across an integrated platform using shared access to market prices. “Exchanges are all looking for ways to boost volume,” says the executive, who notes the conversations between the 2 entities took off rather abruptly in the past months. If successful, an agreement would allow equities traders using Nasdaq OMX to trade Bovespa-listed products and access market data native to both platforms. The exchanges would also look to share technology geared toward issuers. The move is a coup for Nasdaq, which competes against the NYSE for exclusive access to users of LatAm’s largest exchange. NYSE officials decline to comment, noting only that their institution remains committed to providing listing services to LatAm clients. Those differ substantially from trading and routing, which involves a higher degree of network and exchange-related technology. Nasdaq OMX also recently helped the BVC in Colombia set up a futures trading platform in the past year, and other agreements in LatAm may also be coming, according to an executive close to the initiative.

Multiplan, a Sao Paulo-based real estate developer, has filed to issue around BRL650m on the Bovespa. The deal would represent around 18% of the company’s market cap, which stood at BRL3.68bn yesterday. Multiplan is the fourth prospective issuer to file for a Bovespa offering in the past month. Santander, Tivit and Gol have also begun readying offerings that could start pricing in September. Tivit, Gol and Multiplan plan deals sized well under BRL1bn, which indicates the market may be opening up to slightly smaller issues from less familiar names. Other recent sales in that size range in the real estate related sector include BR Malls and MRV. Gafisa shelved plans to do a similarly sized deal when its stock price dropped. UBS Pactual, Credit Suisse and Morgan Stanley are leading the Multiplan deal.

Food producer Grupo Nacional de Chocolates has sold COP500bn ($250m) in inflation-linked bonds on Colombia’s domestic market. The issuer priced COP98.5bn in 2014 bonds at the IPC index plus 4.19%, COP131.8bn in 2016s at IPC plus 4.96%, COP135.5bn in 2019s at IPC plus 5.33%, and COP134.2bn in 2021s at IPC plus 5.59%. Total demand reached COP1.5trn, according to Chocolates. It will use proceeds to refinance debt at the operating company level. Bancolombia managed the sale, rated AAA on a national scale.

Brazilian IT outsourcer Tivit is set to test appetite for illiquid LatAm small caps with an IPO expected to raise $200m-$300m equivalent in the coming months. Equity investors have for many months insisted on quality and scale, but Tivit, which should price in September or October, comes at a particularly opportune moment for small caps. The MSCI LatAm small cap index has rallied 96% YTD, after falling 62% in 2008. That compares to a 61% rise for the MSCI LatAm, which fell 51% last year. “In general, small caps are very sensitive to economic growth,” says Guilherme Reboucas, a portfolio manager at Itau Unibanco Asset Management, whose equity holdings are worth BRL20bn. “In Brazil, many of the small caps are consumer and homebuilding companies, both sectors that have rallied tremendously this year,” he adds, pointing to names like Herring, Guararapes, Hypermarcas and Marisa, which have leapt between 117% and 145% in 2009. Low income homebuilders like Tenda and MRV have also soared, thanks to a new program by the government to foster construction of affordable housing. While many of these companies have yet to deliver results, the outlook for GDP growth is strong and domestic consumption in Brazil is expected to keep expanding, says Reboucas. Itau sees Brazil GDP expanding 5% next year. Liquidity, however, remains an issue for smaller issuers, and investors have so far this year expressed very clear preferences for large liquid names, say bankers. This will be among the challenges for Tivit as it roadshows its offering via Credit Suisse, Morgan Stanley and Bradesco BBI. The IPO will be Tivit’s second attempt, following an aborted mission scheduled for Q4 2007. At around the time of the first attempt, investors had begun to shun small caps, owing to lack of liquidity and in many cases the fact they were trading below issue price.

Colombina has sold COP100bn ($50m) in inflation-linked bonds on Colombia’s domestic market. The food products maker placed COP20bn in 2016 bonds at the IPC index plus 5.73% and COP80bn in 2019s at IPC plus 6.58%. It plans to use proceeds from the sale, rated AA+ on a national scale, to refinance existing debt. Citi managed the transaction.

Tivit, a Brazilian outsourcer of IT services, has refiled its IPO prospectus. Based on the timing of the filing, the company could be ready to price a deal as early as September. Tivit first filed to go public in October of 2007 and kept a filing at the CVM active until mid-2008, when it withdrew the documents. It doesn’t provide information on a potential offer size, though it does suggest the deal will include secondary and primary shares. Credit Suisse is slated to lead, with Morgan Stanley and Bradesco BBI as joint bookrunners.

In the midst of selling its Brazilian Pactual unit to BTG, UBS has lost a key New York-based ECM banker. Enrique Corredor, an executive director in the LatAm ECM group, has left the firm, according to people familiar with the move. It was not immediately clear where he is headed, though according to one market rumor, he may be joining BTG, the Brazilian startup investment bank led by former UBS FICC chief Andre Esteves. If that were the case, it would reveal something about BTG’s ambitions in LatAm investment banking. Corredor, a specialist in LatAm ECM, has worked on a number of deals from issuers based in the region, including Brazil. His joining BTG as a New York-based banker would mean the shop is looking distribute deals originated in Brazil and elsewhere in the region to US-based equities investors, putting it in direct competition with the likes of Itau BBA, Bradesco BBI as well as all other shops focusing on Brazil ECM. Corredor’s departure is a negative for the Swiss bank since he played an important role in its successful ECM franchise, say to people close to the executive. UBS’s LatAm ECM platform continues to be co-led by Evandro Pereira, MD, who is understood to still be at the firm, says a New York-based executive. This year, UBS Pactual was sole lead bookrunner on BR Malls’ follow-on, and joint-led VisaNet’s IPO, as well as follow-ons for MRV, Brasil Foods and Natura. A UBS spokesman declines to comment.