Brazilian steelmaker CSN is moving ahead with its sale of Namisa, from which it hopes to raise up to $11bn. People close to the process say legally binding bids are due in the first week of September from second round participants. A conclusion could come as early as October, say the executives, declining to name participants or describe the bidding group. The steelmaker hired Goldman Sachs to advise it on the sale of the asset, which the company claims makes up an integrated mining operation. M&A bankers hesitated to get involved in the deal, fearing chairman and chief shareholder Benjamin Steinbruch would accept the bids and eventually decline to sell. The executive has a reputation for trying to boost CSN’s share price.
Category: Topics
Posted inDaily Brief
Soriana Readies Last Piece of Gigante Financing
Mexican retailer Soriana has filed to sell up to MXP4.8bn in floating-rate bonds, the second long-term piece of its refinancing of a bridge that funded the $1.35bn December acquisition of rival Grupo Gigante. It has not yet indicated the maturity of the offering, rated AA on a national scale. Inbursa, JPMorgan and Banamex will manage the transaction. In June, Soriana placed MXP5.5bn in 2013 bonds at TIIE plus 43bp through the same trio of banks. The remainder of the bridge is expected to be repaid using commercial paper.
Posted inDaily Brief
Cabei Plans Taiwanese Bonds
Cabei plans to sell as much as TWD7bn ($220m) through a bond issue in Taiwan. Proceeds will fund loans to its Central American member nations. Further details are not yet available, a Cabei treasury official in Honduras tells LatinFinance. Separately, the bank announced that it has placed MXP350m in 2020 bonds in Mexico, denominated in the UDI inflation-linked unit, at fixed-rate of 4.44%, via Bulltick. The development bank likes to spread its funding around the globe, issuing MXP750m in Mexico in May and THB2.37bn ($77m) in Thailand in November, both through Citi. It has issued in Japan, Hong Kong, Singapore, and previously in Taiwan. CABEI has 13 member nations, including Taiwan and 6 other non-regional members.
Posted inDaily Brief
Local Consortium Awarded Peru Concession
A consortium formed by local developer Grana y Montero and logistics operator Oiltanking Peru has won the concession to build and operate a $107m, 245km pipeline that will transport will transport up to18,000 bpd of liquefied petroleum gas and other hydro carbons from a pumping facility operated by Argentinean group Pluspetrol in Pisco to a storage facility in Lurin, a city near Lima, the Peruvian investment promotion agency ProInversion says. The consortium will build the pipeline, known as Poliducto Pisco-Lurin and operate and maintain it for 10 years, ProInversion says. An estimated $70m will be used for the construction of the pipeline, while $37m will be spent in operations and maintenance in the 10 year period, the agency adds.
Posted inDaily Brief
WisdomTree Sprouts Chile, Mexico ETFs
WisdomTree Asset Management plans to launch 25 new exchange-traded funds (ETFs), including funds exposed to the Chilean and Mexican pesos, as well as an overall LatAm local currency vehicle. The funds will provide exposure to changes in the value of the local currency peso relative to USD by investing in short term securities and instruments designed to provide exposure to local FX and rates. They will do this by primarily investing in short term US money market securities and forward currency contracts and swaps to create positions economically similar to a money market security denominated in pesos. They will maintain a weighted average portfolio maturity of 90 days or less and will not purchase any security with a remaining maturity of more than 397 calendar days. Performance is expected to be closely tied to social, political, and economic conditions in Chile and Mexico, and be more volatile than more geographically diversified funds, says Wisdom Tree. Dreyfus, a unit of Bank of New York Mellon, will be the sub-adviser of the ETFs. WisdomTree is also launching separate BRIC and LatAm currency funds. The LatAm vehicle will pick a basket of up to 10 currencies from a pool of eligible currencies to provide a representative and diversified proxy, balancing liquidity and geographic and economic diversity. David Kwan and Zandra Zelaya will be the portfolio managers of the proposed ETFs.
Posted inDaily Brief
S&P Upgrades Panama’s Banitsmo
Citing the implementation of underwriting policies, procedures and technology from parent company HSBC, S&P has raised its long-term counterparty credit rating on Panama’s Banistmo to BBB from BBB minus. The outlook was also revised to stable from positive. “The upgrade reflects the bank’s improved risk management and better financial flexibility, which we expect to continue strengthening its financial profile,” the agency says. The rating reflects the bank’s strong market position in Central America and its adequate operating performance, S&P adds. “The stable outlook reflects our opinion that the improvements in risk management will continue benefiting Banistmo’s financial performance in the medium term,” the agency adds.
Posted inDaily Brief
Brazilian Beats Swiss to ECM Lead
Brazil’s Itau BBA leads the LatAm ECM league table, perhaps for the first time ever, after dethroning longstanding incumbent Credit Suisse. Itau has led $4.53bn worth of equity deals, across six offerings year-to-date, topping Credit Suisse’s $4.03bn across seven deals, according to Dealogic. Volume for the Brazilian shop is almost twice that of the corresponding period of 2007, but it has done less than half the number of issues. JPMorgan comes third for ECM, with $3.77bn in volume, followed by Unibanco, UBS and Bradesco. “We’ve been able to leverage our corporate business and relationships by providing top quality and proven execution in equities, M&A and fixed income,” boasts Jean-Marc Etlin, head of Itau BBA. Itau is also raking in fees, with $82bn from ECM, M&A and DCM this year. Itau had lead roles in mega follow-ons Redecard, Gerdau, and Vale, as well as OGX’s June IPO. And the pipeline looks firm, not just from Brazil. Itau has lead roles in two upcoming IPOs from non-Brazilian issuers, an up to $4bn jumbo from Argentina’s YPF – which is hoping to come this year – and San Antonio Internacional, which could be over $500m. Rivals are quick to dismiss the achievement, in what they say is an unrepresentative year for flow. Citi and JPMorgan also held pole position this year, only to fade away, they say. But based on strong ties to high profile issuers, Itau’s equity platform appears robust. Meanwhile, last year’s leader UBS appears to have dropped out of the race, while compatriot Credit Suisse struggles to distance itself from the slew of underperforming IPOs it launched over the past two years. Many of last year’s equity dogs featured questionable pre-IPO loans handed out to issuers for reportedly juicy fees.
Posted inDaily Brief
Totvs, Datasul Print Merger
Shareholders of Totvs and Datasul have approved the Brazilian software makers’ merger. Totvs will issue 4.46m shares, a 14.3% stake, to Datasul shareholders, and will also pay them a BRL480m dividend. To help fund the transaction, Totvs has secured a BRL205m 6-year loan from development bank BNDES at TJLP plus 150bp, and plans to sell BRL200m in 2019 debentures, also paying TJLP plus 150bp. UBS says in a report it views the deal as accretive to Totvs, and finds the two companies’ customer bases – Datasul mostly sells to larger customers than Tovts’ – to be complementary.
Posted inDaily Brief
Cemex Still a Buy: Banif Ixe
Banif Ixe is maintaining its buy recommendation on Cemex and has a year-end target price of MXP27.00 for the company’s shares. “Although we see as negative that last night the Venezuelan government took over the operations of Cemex in Venezuela, the impact of the lost ebitda is not enough to change our recommendation,” says the shop. The nationalization of the company’s assets will reduce Cemex consolidated ebitda by around 3.7%, add the analysts. A takeover implying firm value to Ebitda multiple of 6.2x would make for a favorable transaction for Cemex, says Banif Ixe. “If this happens, Cemex will receive approximately $1.02bn from the Venezuelan government, with a neutral impact on the company.”
Posted inDaily Brief
Citi Unveils Honduras Operation
Citi’s Honduran unit Banco Citibank de Honduras has begun operations. The bank is the result of the merger between Banco Cuscatlan and Banco Uno. “In Honduras, we see a financial system that has evolved in the right direction, that allows free competition among global and local institutions and that allows that competition to bring benefits to the clientele,” Edgardo del Rincon, the executive in charge integrating Citi’s operations in Central America, tells LatinFinance. “We see Honduras … as an important player in the context of Central American integration,” he says. Citibank de Honduras will have $400m in assets, engaging in micro lending, retail, commercial and corporate banking operations, as well as a credit card unit called Cititarjetas de Honduras.