Category: Brazil

Brazilian water utility Companhia de Saneamento de Minas Gerais (Copasa) has approved a BRL245m financing from the BNDES government development bank. The 10-year facility would pay an expected interest rate of TJLP plus 1.73%, and feature a 3-year grace period. Proceeds would fund infrastructure improvements. The water utility controlled by the government of Minas Gerais state still must put the matter to shareholders for approval February 23.

Despite the impact of souring global markets on risk appetite, Banco Cruzeiro do Sul is preparing to price at the end of this week a new 5-year bond. The Ba2 mid-sized Brazilian bank has not communicated the size, but is heard aiming to do at least $250m in the high 8% yield range. The issuer held meetings with a few investors in Europe and the US last week. BCP and BTG Pactual are managing the 144a/Reg S sale. Cruzeiro sold $175m in 2012 bonds in September to yield 8.5%, also through BCP. It is pushing tenor further than high grade Banco Votorantim, which last week succeeded in raising $500m in 2013 Baa2 notes priced at 99.563 with a 4.25% coupon, to yield 4.375%, in line with 4.375% area guidance. Demand hit $750m, according to bankers managing the sale.

Brazilian tool manufacturing company Industrias Romi says it has offered to acquire New York state based Hardinge for $8 per share in cash, or about $93m. Romi had made the same unsolicited offer December 14, but was rejected. It says the offer represents a 63% premium to Hardinge’s share price at that date. On February 5, Hardinge’s shares closed at $8.07. Hardinge says its board will evaluate the proposal with financial advisor Jefferies & Co. and legal advisor Wachtell, Lipton, Rosen & Katz. Romi’s financial advisor is HSBC Securities and Shearman & Sterling is its legal counsel.

Banco do Brasil (BdB) is making a concerted effort to step up long-dated dollar lending to domestic and non-Brazilian corporate clients. The move is rattling foreign banks active in Brazilian syndicated and bilateral lending. BdB and other Brazilian banks have nabbed sizable market share by offering local clients relatively cheap loans at attractive tenors. In 2009, BdB’s deployment of pre-export credit to companies surged 6x, albeit from a low base, to $3.1bn, according to Admilson Monteiro Garcia, head of the bank’s international division. That figure could jump above $5bn this year, he adds. “In the second half of last year, there were 6 pre-export loans done in Brazil and we participated in all of them,” adds the banker. The strategy of offering clients dollar loans – which also include shorter dated export credits called ACCs and ACEs – marks a significant departure for BdB, which has historically focused exclusively on BRL-denominated loans. Total dollar lending at BdB grew marginally in 2009 to $14.0bn, up from $13.5bn in 2008, though longer dated pre-exports accounted for a larger portion of the pie in 2009 than the previous year. Among deals BdB has participated in recently are Fibria, Cosan and Odebrecht’s twin platforms. For iron ore miner Samarco, the bank swallowed whole a $300m 5-year trade credit line late last year. This torpedoed competitive bids from foreign banks eager to lend to the high quality credit. Monteiro tells LatinFinance that the credit crunch actually boosted the state-owned bank’s liquidity position as global lenders and corporate depositors migrated to quality institutions, such as BdB. “This extra liquidity came to us at a time when we wanted to create anti-cyclical movement [to lend in Brazil,]” he says. The banker notes corporate dollar lending from international banks was drying up and companies were in need of dollar lines. “This [growth in lending by BdB] won’t stop in 2010,” says Monteiro, who claims his bank’s share of the do

While turmoil in the global markets causes issuers to rethink plans, Brazil’s Banco Votorantim appears to be pressing ahead with a bond issue. It has put out 4.375% area guidance on a new 2013 bond. Investors expect a $500m transaction and pricing is expected early next week. The Baa2 deal through BNP, Banco do Brasil, Bradesco and UBS will add some senior debt to the bank’s capital structure following a subordinated sale last moth. The 2020 Tier 2 sale saw demand of $3.6bn and priced at par with a 7.375% coupon. BofA-Merrill Lynch, Banco do Brasil, Deutsche Bank and Itau managed that sale.

Banco Votorantim is planning to splash some senior debt on top of its recently raised $750m in Tier 2 capital. The Brazilian bank that is majority owned by Grupo Votorantim is readying 3-year senior bonds, of an undetermined size. Pricing is expected early next week, according to bankers managing the sale. BNP, Banco do Brasil, Bradesco and UBS are the leads and the deal is rated Baa2. Votorantim’s 2020 Tier 2 sale saw demand of $3.6bn and priced at par with a 7.375% coupon. BofA-Merrill Lynch, Banco do Brasil, Deutsche Bank and Itau managed that sale. Banco do Brasil owns 49% of Banco Votorantim.

Brazil development bank BNDES presented its BRL1bn ProCopa Turismo financing program to hoteliers. The program will offer financing for renovation projects and construction of new tourism facilities. The loans will have terms of up to 12 years for renovation projects and up to 18 years for the construction of new facilities. Margins will include a fixed-rate base spread that ranges from 6.9%-8.8% plus a credit spread. BNDES is also launching the ProArenas program, will make available BRL4.8bn to finance up to 75% of the construction of stadiums and other urban infrastructure. Each project will have access to loans of up to BRL400m that bear interest rates of TJLP plus the 0.9% BNDES spread plus a borrower-specific credit spread. Tenors can be up to 15 years with 3-year grace periods.

Brazil real-estate company Brookfield Incorporacoes has issued BRL366m in non-convertible debentures rated A+. Earlier in the week the company had upsized the issue by BRL66m.Proceeds will be used to pay down debt. Santander managed the sale.

Brazilian real estate developer MRV Engenharia has kicked off its roadshow for a 2014 BRL400m debenture issue. The company says it will pay up to 1.6% over the DI rate. Bradesco BBI is managing the sale. Proceeds will be used to acquire land for new projects and to strengthen working capital.

Brazil telecom company Telemar Norte Leste, also known as Oi, has suspended a BRL2.25bn ($1.3bn) non-convertible debenture issue. The company says it and Banco Santander, the manager of the sale, decided to suspend the issue to focus on the reorganization of Brasil Telecom, which it purchased last year.