Category: Brazil

Online retailer B2W has started the sale of BRL364m in 2013 debentures, paying interest at the DI rate plus 2%. Proceeds from the A rated sale will repay short-term debt and finance investments in logistics and technology. Unibanco is managing the transaction. B2W is the result of a merger between Brazilian retailers Submarino and Lojas Americanas.

Brazil’s Infinity Bio-Energy has agreed to buy an ethanol production facility from Brasil Energia Renovavel Participacoes for $100m in Infinity shares and assumed debt. The Destilaria Guaricanga in Sao Paulo state will add an immediate installed current crushing capacity of 1.2m tons of sugarcane to Infinity’s current crushing capacity of about 9.5m tons representing an increase of more than 12% percent. Closing is expected by September. Guaricanga had gross assets as of end-2007 of approximately $205m and recorded a net loss last year of approximately $3.5m.

Brazil’s monetary policy committee, or Copom, increased the benchmark Selic rate by 75bp on Wednesday to 13.00% through a unanimous decision. Economists were divided in their expectations for a 50bp or 75bp hike. An accompanying statement said the move is designed to curb inflation. “This suggests that the projected inflation path might have deteriorated, and had the central bank stuck with a 50bp pace, the convergence of inflation to the target would have been longer than desirable,” says Goldman Sachs. “According to our baseline path, today’s 75bp hike should be followed by two more hikes of 75bp in September and October, and two concluding 50bp hikes in December and January, to end the tightening cycle,” the shop adds. That would take the Selic to 15.50%, just under the 15.75% last seen in April 2006.

Brazil’s Marfrig has acquired the Pemmican beef jerky brand from US food producer ConAgra for $25m. The Brazilian beef producer acquired the asset through its subsidiary Mirab USA. The two agreed to jointly distribute the Pemmican brand of snack beef jerky for five years. Like its peers in the Brazilian meat and poultry sector, Marfrig has been expanding domestically and internationally this year, spending more than $700m on Argentina’s Mirab, Brazil’s Carroll’s, and units of American OSI.

Suzano, the Brazilian paper and pulp producer, will invest $3bn through 2015 in several projects aimed at increasing production. Suzano expects to use its own cash to pay for the expenditures, as well as other forms of financing, including tapping the capital markets. As a part of the plan, the company has agreed to pay mining company Vale $110m for some of its forestry assets over the next 7 years. The memorandum also establishes the supply of reforested wood by Vale and pulp transportation using Vale’s railroad network. Total investments in forestry assets will total $700m. Other investments include improvements in Suzano’s Mucuri production plant, and the expansion of production lines in Piaui and Maranhao.

Bradesco’s equity investment arm Bradespar has issued BRL1.4bn in promissory notes. The 180-day paper will pay 106% of the DI rate. Bradespar which holds stakes in companies such as Vale CPFL Energia, says the notes were acquired by a total of 166 investors, including 148 investment funds. Bradesco’s capital markets unit led the offering, with UBS as co-manager. The placement follows Telemar’s placement of BRL3.6bn in one-year notes, as Brazilian issuers seek financing options in the short-term debt markets.

Brazilian metal producer Paranapanema plans to place BRL950m in convertible debentures within the next six months. A BRL200m 2010 tranche is set to pay 6%, while a BRL750m 2019 tranche pays 9%. The bonds will be immediately convertible into shares at the holder’s discretion, according to a filing which does not detail a conversion premium. The offering is part of an asset restructuring required by a 2006 agreement with creditors. Under the agreement, Paranapanema has the choice to raise capital through debentures or do an IPO. Plans for an IPO were canceled in March. Itau is managing the debentures sale. Separately, mining company Vale reiterated last week that it is eyeing the purchase of two of Paranapanema’s three main assets.

Regulators have approved the issue of BRL150m in 2010 debentures from BIC Arrendamento Mercantil, the leasing unit of BicBanco. The notes pay 150% of DI. Proceeds will expand lending operations. HSBC is coordinating the issue. A recent change in regulation has made leasing debentures a less attractive funding option for banks and has contributed to a drop in the number of such deals. At the same time, it has led to an increase in other types of funding including CCBs, or bank notes, say local DCM bankers.

Brigitte Posch has left Deutsche Bank, where she was head of LatAm securitization, to join Pimco. At Deutsche, she led an effort to establish a new Brazilian ABS asset class called precatorio, which involves the securitization of settlement payments by federal, state and municipal governments. Separately, Pimco’s EM team recently lost corporates analyst Adam Borneleit, who left to join BlueBay Asset Management in London.

Several global mining and steel companies are eyeing Namisa, a collection of assets belonging to Brazil’s CSN which the company says make up an integrated mining complex, including a mine and logistics to the ocean. Among the suitors are Russian steel company SeverStal, Indian miner Essar, China’s Shagang Group, say bankers away from the process. Other potential buyers include miners Anglo American and Cleveland-Cliffs, as well as India’s JSW Steel, speculate people seeking participation in the transaction, though the process is heard in a second round of bidding, and some of the names initially interested may already be out of the running. CSN hired Goldman Sachs to advise it on the sale, which the company estimates should be worth $10bn. Goldman Sachs declined to comment and CSN executives did not return calls.