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
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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.
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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.
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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.
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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.
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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.”
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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.
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Brazil Homebuilder M&A Gains Momentum
The much anticipated wave of mergers in the Brazilian homebuilding space is in full swing as stocks of smaller and medium-sized companies continue to get hammered, creating bargain opportunities for cash-rich buyers. One potential deal in the making is the acquisition of Company, a high-end apartment developer in Sao Paulo, by Brascan Residential Properties, a Bovespa-listed entity 60% owned by Brookfield Asset Management, say people away from the talks. Nick Reade, chairman of Brascan Residential, declines to comment on potential targets, limiting his remarks to “We believe in the consolidation process and are looking at several options right now.” Company’s stock has careened some 56% since hitting a high of BRL22.81 in mid-November. Its market cap stands at BRL716m. In April, Brascan Residential acquired MB Engenharia for an open-ended price tag that could range from BRL160m-BRL500m or more, depending on future earnings. In June, Cyrela paid BRL1.54bn for fellow developer Agra, while earlier this month Brasil Brokers took a 51% stake in Abyara’s brokerage business for BRL250m. Among the more vulnerable Brazilian developers are Inpar, down 82% from its IPO, EZ Tec, down 70%, CR2, down 59% and Helbor, down 46% from its IPO price. Brascan Residential’s stock is down 60% from its IPO, but the company counts on sponsorship from its wealthy parent, which has some $40bn in global real estate holdings.
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Tourism Developer Pulls IPO
Summer Brasil Turismo has canceled plans to go public on the Bovespa. The transaction had been on ice since the spring, when it was postponed due to poor market conditions. Following the expiration of its postponement period , the company formally removed its filing from the CVM. “We are considering various alternatives,” Andre Menezes, head of IR, tells LatinFinance, adding Summer Brasil would consider a private share sale, or an attempt to return to the public markets at a later date. Menezes declined to state the amount of proceeds Summer is seeking to finance its tourism-related developments in Brazil’s northeastern region. UBS was to lead the equity sale, originally announced in January.
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GMAC Mexicana to Sell Auto Loan ABS
GMAC Mexicana is preparing to sell floating-rate MXP-denominated bonds backed by a pool of auto loans. The size and tenor have not yet been defined, but the offering will consist of at least one subordinated tranche. Although GMAC’s Financiera and Hipotecaria units have issued MBS in Mexico, this offering would be the first securitization by GMAC Mexicana, the auto loan unit. Scotia is managing the transaction, expected in the next one to two months, according to executives close to the process.