Indians aim to boost involvement in LatAm, as their companies seek high-growth markets as well as new sources of raw materials and agricultural products. Facing demographic trends that suggest a transformation similar to China’s, Indian firms bring different offerings to the table than the region’s more established trading partner, officials tell a LatinFinance panel. Two decades since India embarked on a more open economic policy, India is faced with rising food and energy prices, and like China it is likely to seek investments abroad in these sectors. “It is in food where Latin America will offer the most synergistic relationship [with India],” says TCA Ranganathan, chairman of the Exim Bank of India. For instance, he notes, India has rapidly become a net importer of high value crops such as sugar cane due to water and land shortages. Indian investment flows to LatAm reached about $25bn last year, representing an increase from next to nothing 10 years ago, but it still falls short of the $140bn from China. That India’s global expansion comes through private entrepreneurs, as opposed to China’s government-driven model, may be beneficial to LatAm, Ranganathan explains. “You won’t see a $140bn figure [from India-LatAm],” Ashutosh Maheshwari, CEO of Motilal Oswal Investment Banking. “It’s not the government driving it. These are corporates that are accountable to those from whom they raise money.” This means that Indians are better disciplined and use capital wisely, but are unable to have a 20 to 30-year investment horizon like the Chinese do, he explains. Expertise in services, engineering and other specialty areas is where India is poised to add value, rather than through sheer dollar size. Indian crop-protection company United Phosphorus has already made six investments in the region and appears satisfied with the quality of labor in the region. “The management in Latin America is very mature, very competent and very reliable,” says Vikram Shroff, the company’s ex
Category: Regions
Itau Names Colombia Country Manager
Ramiro Gonzalez-Prandi has been named Itau BBA’s Colombia country manager now that the Brazilian bank has been granted approval to operate a wholesale and investment banking unit in the country. Gonzalez-Prandi was global corporate and investment banking director for Banco Itau Chile, a position he held since 2007. He is being replaced by Christian Tauber, who was in charge of corporate banking and corporate finance. Itau, along with other Brazilian institutions, including BTG, have been shopping in Colombia. Itau was recently said to be a finalist to take the 50% of Colpatria before Scotia bought the Colombian bank in October. Itau BBA operates in Argentina and Chile and has a representative office in Peru.
Sugar Producer Considers Brazil Cogen Sale
Shree Renuka Sugars is considering the sale of the energy cogeneration units of its Equipav and Revati plants in Brazil, Gautam Watve, its head of strategy and planning, tells LatinFinance. “We are looking at focusing on our core business of sugar and ethanol, and that is the reason we are looking at the cogen sale,” Watve adds. Proceeds would go toward deleveraging the assets, which had high debt levels when the Indian sugar producer bought the mills. Watve declines to offer further details on any financing or the timing of a sale, noting only that the company has spoken to interested parties. Shree Renuka bought the two mills in Sao Paulo state last year, marking its first acquisitions in LatAm. Shree Renuka had $485m in debt at its Brazilian operations as of Sept. 30. The company last week announced a consolidated net loss of INR6.16bn ($121m) for Q4, due mainly to lower sales and a Brazil-related foreign exchange loss of INR5.70bn.
Titularizadora Places TIPs
Securitization specialist Titularizadora Colombia has sold COP379.3bn ($198.1m) of 10-year MBSs, or TIPs as they are called locally, at a rate of 7.6% in the local markets. The issue was rated AAA on a national scale. The sale saw demand above COP384bn. Titularizadora previously sold COP258bn of senior RMBS bonds in September.
Banobras Prices MXP Bond
Mexico’s Banobras was able to upsize a multiple-tranche bond in the domestic market yesterday to MXP7bn ($513m) from MXP5bn and price inside expectations after generating some MXP19bn in demand. The development bank priced a MXP5bn 4-year floating rate bond flat to TIIE, a MXP500m 10-year UDI-denominated piece at Udibonos+50bp and a MXP1.5bn fixed-rate portion at Mbonos+70bp. Banobras was heard looking to pay TIIE 0bp-5bp on the 4-year floater, Mbonos+80bp on the 10-year, and Udibonos+60bp for the inflation-linked 10-year. Bank of America Merrill Lynch and Banamex managed the sale, rated Aaa on a national scale. Banobras last issued in the local market in 2010 via Banamex, when it sold MXP7bn in 4-year bonds after generating some MXP19bn in demand.
Ferrovial Sells 40% In Chilean Toll Operator
Spain’s transportation infrastructure investor Ferrovial sold its remaining 40% stake in Intervial Chile, a toll road operator, to Colombia’s Interconexion Electrica (ISA) in a deal valued at EUR160m (US$216m). The transaction is part of a purchase option that ISA had the right to exercise as agreed in Sept. 2010 when it purchased the initial 60% stake from Ferrovial. Intervial Chile currently operates 5 different toll road concessions in the Andean country. ISA officials said no advisors were involved in this option exercise agreement and noted that the final value of the deal could vary by the time of the closing, expected over the next 90 days. Colombia’s ISA has operations in Central America as well as Panama, Chile, Colombia, Brazil, Bolivia and Peru.
Guatemala’s Industrial Preps More DPRs
Guatemala’s Banco Industrial will likely come to market next year with another diversified payments rights (DPR) bond, Luis Jorge Sifontes, assistant director of external financing, tells LatinFinance. “For us it is an efficient [way to raise funding] because it gives us better pricing,” he adds. It most recently raised $205m through a dual-tranche DPR issue. The 7-year was split into fixed and floating rate portions paying around mid 5% and L+237bp respectively. It also placed a 10-year at around L+350bp. On these types of trades, the bank has traditionally mandated Wachovia, though Citigroup led a transaction in 2007. The bonds are backed by remittances that the bank receives from companies and families. The borrower has also tapped the international markets twice with subordinated issues, most recently in July when Bank of America Merrill Lynch (BAML) led a $150m 10-year Tier 2 issue that was priced at par to yield 8.25%. However, Sifontes says the bank has no need to raise more subordinate debt and is unlikely to return to the market in the near-term with these kinds of transactions.
Banco Popular Puts Local Bond on Hold
Colombia’s Banco Popular, which had been expected to raise up to COP250bn ($134m) Wednesday in the local bond markets, has decided against such a move. The locally AAA-rated bank is likely to wait until next year in light of the volatility emanating from Europe, says a person familiar with the situation. The bank has no immediate funding needs, but next year’s issue could be larger and may take place as soon as February, he adds.
Contour Launches Colombia IPO
ContourGlobal LatAm has launched a COP273bn ($143m) IPO, the first such transaction from an issuer in one of the region’s large markets since July. The power generator with assets in Colombia and Brazil is offering 27.6m shares, or about 28% of itself, at COP9,900 each, in a sale period open through December 5. The issuer, part of US-based ContourGlobal, is raising funds to develop projects. The company’s main operating assets include a stake in the Termopaipa and Termoemcali power plants in Colombia, as well as a wind farm and two hydroelectric projects in Brazil. Bancolombia and Corredores Asociados are managing the sale.
Titularizadora Poised to Return
Colombian mortgage securitization specialist Titularizadora is planning to issue COP379.3bn ($198m) of fixed-rate MBS in the local markets today. The issue is rated AAA. In September, Titularizadora sold COP258bn of senior RMBS bonds after generating a book that was 1.5x oversubscribed. The bonds were backed by loans originated by Bancolombia and Davivienda.