Category: Brazil

Companies in the Brazilian mining sector are tipped, while PDVSA and Chilean ETFs are among top sells, according to an Institutional Investor panel in New York. Christopher Ecclestone, strategist for Hallgarten and Company sees the mining sector in general as a good investment opportunity. Privatization of mining facilities in Chile, Peru and other countries in LatAm are opening new investment opportunities and produce side projects in supporting infrastructure. Ecclestone names Brazilian mining company MMX as a top buy. PDVSA bonds are a top sell for Rob Rauch, director of research at Gramercy Advisors. He cites the loss of technical capabilities within the company and zero investment in infrastructure, which could undermine the ability of the company to stand on its feet. “Those bonds are cheap, they are going to get cheaper,” says Rauch. He also tips Argentine sovereign debt as a buy. Other investors in the forum tipped Petrobras and Brazil’s Lupatech as top buys. All of the panelists predicted decent gains overall for the year, in the range of 10%-30%, depending on asset class.

Banco Santander has named Banco Real Chairman Fabio Barbosa as head the Spanish bank’s businesses in Brazil. The change will be effective once Banco Real is legally separated from ABN AMRO and has obtained the relevant authorizations. Gabriel Jaramillo, the current country head of Santander in Brazil, will “provide advice and support to the office of the chairman of Santander.” Jaramillo’s post will be filled temporarily by Jose Paiva until Barbosa takes over the combined operations. Santander gained control of Banco Real last year by teaming up with RBS and Fortis to acquire ABN.

S&P says it is keeping the B+ rating of Brazil-based meat-processing company Bertin on negative CreditWatch until the impact of its purchase of Goult Participacoes is known. Bertin is buying 56% of Goult, which in turn owns about 75% of dairy products processor Vigor. It was put on the watch list late November.

Trade credit insurer Euler Hermes has opened an office in Bogota to provide accounts receivable management services to clients in Colombia. Euler Hermes also has offices in Brazil, Mexico and Argentina.

Brazilian Real estate developer Tecnisa has entered into a joint venture with Brazilian Securities, in which it will receive a BRL200m credit line from the latter. According to an official close to the deal, Tecnisa will acquire land and cede the credit rights to Brazilian Securities, which will securitize them. Banco Real has committed to purchase the first BRL50m. The financing rate of the 3-year facility resets annually at TR plus 12.5%.

Brazilian Finance and Real Estate has abandoned a primary offering, citing poor market conditions. “As soon as the market comes back, we’ll be ready to go out again,” Fabio Nogueira, director, tells LatinFinance. The real estate financial services provider filed last year for the offer without indicating how much it plans to raise. A source close to the deal tells LatinFinance it was aiming for BRL500m. Credit Suisse was to lead the offering, with UBS and Banco Real as co-managers.

Brazilian aircraft maker Embraer announced preliminary talks with the Argentine government for an aviation cooperation plan. The announcement came on heels of a meeting between Brazil’s Lula and Argentina’s Cristina Fernandez in Buenos Aires Friday. Meetings between Embraer and Argentine government agencies raised the possibility of selling aircraft to Argentina and possible maintenance and parts supply business for Aera Materia Cordoba (AMC). The meeting of the two presidents also opens the doors for the creation of a joint commission to pursue uranium enrichment for energy, as well as transport and space satellite cooperation, wires report.

LatAm was a relatively more stable EM region during a volatile January for hedge funds, but investors targeting Brazil experienced higher losses than those more diversified, says HedgeFund.Net (HFN). The HFN LatAm average lost 2.58% in January, while funds focusing on Brazil lost 3.39% that month. The HFN EM average dropped 4.74% in January, the benchmark’s biggest monthly drop since 2000, says HFN. It was severely dented by China and India losses. “The sell-off in international markets on January 22 was the exclamation point of one of the worst monthly drawdowns for emerging markets in recent memory,” says HFN. “Latin America proved to be a more stable emerging market region,” it adds. In contrast, the US average hedge fund loss was 2.02% in January.

Brazilian mining giant Usiminas will today take its $1.2bn loan to retail syndication at a bank meeting at the Intercontinental Hotel in New York. The loan is heard to be moving at a fast clip and already enjoying commitments from several banks at the MLA level. Bankers are watching the deal because it may become a reference point for the market. The investment grade deal includes the typical trade-related portions, but also an unusual revolver structure. A 5-year trade piece pays 110bp over Libor and a 7-year portion offers 135bp over Libor. A $700m 2-year liquidity backup revolver pays Libor plus 75bp on any drawn portion, and 45% of the 75bp if the facility goes undrawn. HSBC is leading.

Brazilian car-rental agency Localiza has launched the sale of BRL300m in one-year promissory notes, it said. The notes pay interest at the DI rate plus 95 basis points, and will be offered only to qualified investors based in Brazil, represented by investment funds. Proceeds will go towards general working capital. Unibanco is managing the sale.