Category: Equity

Brazil’s inflation, as measured by IPCA, ended the year at 3.14%, the lowest in almost a decade and among the lowest in the region in 2006. The rate was also well below the government’s target of 4.5%. The low rate means that the Central Bank has plenty of room to continue cutting the benchmark Selic rate at its next policy meeting on January 24. Inflation last year also fell significantly against the previous year: in 2005 prices rose by 5.69%.

State-run power company Companhia Energética de São Paulo (CESP) is planning to issue $330 million-worth of IPCA-linked bonds due 2015 to prepay outstanding debt due 2008 and 2011. Standard Bank is the sole bookrunner. The issuance is part of a larger medium-term note (MTN) program of up to $975 million. Moody’s Investors Service has assigned the notes a Ba3 foreign currency rating.

Brazil’s Camargo Correa Desenvolvimento Imobiliário, the real-estate unit of local conglomerate Camargo Correa is planning an IPO via Bovespa to join the burgeoning real estate sector listing on the exchange. The company is planning to sell up to 36 million common shares at an expected price of between 12.00 reais and 16.50 reais per share ($5.6-$7.8). Trading is due to start on January 31. Shares will be sold in Brazil and also to qualified investors in the U.S. under rule 144A in the form of global depositary shares. Credit Suisse will lead.

Mexican mining company Autlán, in a filing with the Mexican Stock Exchange, said it had issued $30 million in notes due 2012. It plans to use the money to pay down existing liabilities and improve its debt profile. The five-year notes will pay a fixed rate of 9.25% and will carry a two-year grace period. The transaction was coordinated by BCP Securities.

Brazilian real-estate developer Rodobens Negócios Imobiliários has issued details of its IPO, first announced at the end of November. Rodobens said it will sell 20 million common shares via Bovespa and could offer extra shares if the demand exists. It expects a price in the range of 17 and 21 reais ($8-$10) per share. Shares will be sold in Brazil and to qualified investors in the US under rule 144A. Trading is expected to begin January 31, the company said. JP Morgan is coordinating.

Brazilian real estate developer Lopes Consultoria de Imovéis (Lopes) says it has raised $222 million (474.7 million reais) from its listing on Bovespa’s Novo Mercado last month. The company joined the growing band of real estate companies lauching IPOs on the exchange. Since late 2005, five companies in the sector have raised financing via share offerings on the exchange with several more awaiting approval from the local securities commission. Lopes made a secondary offer of 23.736 million shares, more than initially planned, with 16.867 million bought by foreign investors. The shares were sold in Brazil and to qualified foreign investors, under 144A rules. Banco Pactual led the transaction.

Brazilian paper and pulp company Suzano Papel e Celulose is to make a secondary share offering via Bovespa. Suzano Holding, the company’s controlling shareholder, will sell 2.65 million preferred shares, while shareholder BNDESpar will also sell an undisclosed amount. The shares will be sold in the domestic market and also under 144A rules in the US. Credit Suisse will act as lead coordinator.

Brazil’s annual inflation slowed in November, dropping to 3.02% from 3.26% in October, as measured by the IPCA index. On a monthly basis, the index rose 0.31% compared with 0.33% in the previous month according to the IGBE, the national statistics bureau. Inflation for the first 11 months of the year was 2.65%, versus 5.31% for the same period last year. Big risers during the month were foodstuffs (1.05%), cigarettes (4.63%); the costs of fuels, electricity and medicine fell.

Brazil’s IPCA inflation index is expected to record a 3.2% increase in 2006, rising to 4.1% in 2007 and 4.3% in 2008, according to Henrique Meirelles, governor of Brazil’s Central Bank. This slight growth is much better than in previous years, and Meirelles, speaking at an EMTA panel in New York, boasted many other positive macro factors that are contributing to a better growth outlook. Besides a better legal and institutional framework, Meirelles referred to positive debt dynamics, flexible exchange rate and improvement in the balance of payments that are all contributing to what he terms a “stability dividend”. He added that Central Bank officials were currently defining policy for the next Lula administration and would look to boost foreign investment. “The priorities are fostering investment, public and private. That’s our challenge … and keeping price stability,” said Meirelles.

Argentine agrochemicals company Insumos Agroquímicos (Insuagro) will become the second SME to list on the Buenos Aires Stock Exchange, when it floats its stock towards the end of the month. The company kicked off its domestic roadshows in Buenos Aires, and is looking to drum up interest in the sale of 2 million shares in an IPO it hopes will raise 1.5 million pesos ($0.5 million). The shares, which represent 18.8% of Insuagro’s capital, are looking to price between 0.78 and 0.81 pesos and will be placed by local brokers Cordeu y Benedit. Insuagro will be the third company in as many weeks to list on the local stock exchange after six years without any IPOs. It will also be only the second firm to list on the newly launched SME board at the exchange. The offering has been in the pipeline for several months.