Category: Brazil

A new Tier 2 from Brazil’s Banco Pine hit the wide end of guidance and shrank from its expected size by $25m to $125m, as continued risk aversion appears to still be complicating new issuance. The Ba3 rated 2017 transaction priced at 98.748 with an 8.750% coupon to yield 9.000%, or UST plus 588bp, the wide end of 8.875% area guidance. HSBC, Credit Suisse and Banco Espirito Santo led the sale, which followed an Asia, US and Europe road show. Pine’s previous dollar bond was a 7.375% coupon $150m 2-year deal in June 2008. Mexico’s BBVA Bancomer is expected to award soon a mandate for a $500m+ subordinated bond, while in the mid-size sector, BESI Brasil is marketing through Thursday a 2015 bond expected at $350m.

Brazilian homebuilder Inpar is scheduled to price a follow-on of 70m shares today via Credit Suisse, Bradesco BBI, HSBC and Santander. Investors have expressed concerns over abundant supply from LatAm in sectors including homebuilding. Inpar’s shares have traded down 10% from a recent high of BRL3.91 on January 19 to close at BRL3.52 Monday.

CSN’s board has approved the issuance of up to BRL10bn in promissory notes, the Brazilian equivalent to commercial paper, to help it finance a potential bid for Cimpor. The company has launched a tender offer for all of Cimpor’s shares for EUR5.75 a share, valuing the company’s equity at EUR3.86bn. CSN was rumored to have secured commitments from Banco do Brasil and Bradesco for its bid. CSN’s tender offer to shareholders goes through February 17. The BRL10bn amount suggests the company has left room, at least under its current filing, to increase the bid, which market participants believe could happen. Portuguese press also reported Monday that Camargo Correa, which made a competing verbal offer to merge operations with Cimpor, has offered to acquire Lafarge’s 17% stake in Cimpor. Based on Cimpor’s EUR6.25 closing price Monday, that stake could be worth EUR714m. BES is advising CSN. Credit Suisse and BofA-Merrill are advising Camargo Correa, and Deutsche Bank is advising Votorantim, which has yet to make a move.

Amil, the Brazilian healthcare provider, says it has concluded a tag-along offer to minority shareholders of Medial Saude, the insurer it agreed to acquire for BRL612m in November. The tender to minority holders cost Amil BRL557m. It involved the purchase of the remaining 45% of the company’s shares it did not own at BRL17.50 per unit, which equals the price per share paid in November adjusted by the Selic.

Meatpacker JBS has raised BRL2.27bn through the sale of 1.3m convertible debentures to BNDESPar, the equity arm of Brazil’s development bank. The company does not specify terms on the notes. Starting today, it will begin distributing the remainder of the bonds that were not placed with the BNDES, which includes 697m debentures. It does not state which investors will participate in the deal.

Global Village Telecom plans to repurchase all of its remaining 12% coupon 2011 bonds. The $179.4m outstanding amount represents 39.3% of the Brazilian telecom’s debt and will be bought back February 26. GVT is paying 102.5% of the principal plus unpaid interest from December. The bonds were issued by the GVT Finance vehicle in 2006. GVT says it will use its own funds to repurchase the bonds, which it must do as a result of Vivendi agreeing to take control of the company in November.

Brazil’s Independencia is preparing to pitch the buyside on a new debt transaction, according to investors following the meatpacker. US boutique BTIG is managing the process, they say. It had previously been reported that Independencia is contemplating a $260m cross-border issue in lieu of a DIP facility it previously hoped to raise with funds and banks to help it start up operations. A BTIG fixed income official declines to comment.

Brazilian real estate company Brookfield Incorporacoes says it is upsizing its local debenture issue to BRL366m from BRL300m. The issue will be made in 2 tranches. A 2014 tranche will pay 2.0% over DI and the 2016 tranche will pay a fixed rate of 9.5%, according to the prospectus. Proceeds will be used to pay down debt. Santander is managing the sale rated A+ on a national scale.

Brazil’s Banco Pine has set price guidance of 8.875% area for a new 7-year Tier 2 bond, expected to price late today or Monday. The Ba3 transaction is expected to be at least $150m in size, and follows an Asian, US and European road show. HSBC, Credit Suisse and Banco Espirito Santo are leading the sale. Interest in subordinated bank bonds is picking up, with a Baa2 rated $750m 10-year Tier 2 from Banco Votorantim that priced to yield 7.375% last week. Pine’s last dollar bond was a 7.375% coupon $150m 2-year deal in June 2008.

Banco do Brasil is finalizing plans to issue up to BRL6bn in new shares in the coming month. The deal will likely come to market before the end of H1, according to a finance official. The sale is part of an equity raise of BRL8bn-BRL10bn the bank is conducting whose objectives include bringing BdB’s free float up to the 25% level required by the Novo Mercado. It would also allow government shareholders to maintain their stakes. Brazil’s treasury owns 66%, state pension plan Previ owns 10% and BNDESPar 2.5% of the bank’s total equity. If BdB issues BRL10bn in primary shares, the government entities will look to exercise rights to avoid dilution, and therefore could account for just under BRL8bn of the issue. That would leave approximately BRL2.1bn in primary shares to be placed with public investors. In addition, government entities plan to jointly reduce collective holdings by 5%, placing those secondary shares with the public, resulting in another BRL4bn units being distributed, says the official. BdB has not yet begun to select banks, though it is certain BdB BI, its investment bank unit, will have a lead role. BTG Pactual, which has worked with the bank in the past and is currently advising it on its insurance sector holdings, will also likely have a role. The lead group will probably include at least 3 others, given the size.