Scotiabank is rumored to be in talks to acquire Nuevo Banco Comercial (NBC). According to a report in El Pais, the Uruguayan commercial bank is in talks to sell itself to the Canadian bank. NBC was acquired from the Uruguay government for $167m in 2006 by a group of investors led by global private equity firm Advent International. At the time, NBC was Uruguay’s largest commercial bank, created by the government in 2002 out of 3 constituent banks in response to the banking crisis. According to Advent, NBC has $1bn in assets and a net worth of $181m. Scotiabank declines to comment on the matter. NBC and Advent do not return calls for comment.
Category: Regions
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Cosan Invigorates Perpetuals
Cosan has raised $300m in NC5 perpetual bonds, offering buyers a yield that appeared to compensate for recent skepticism surrounding the structure. The sugar and ethanol producer drew more than $900m in orders, according to bankers on the deal, and was up about 0.25 point in the aftermarket, according to investors. The Ba2/BB issue priced at par with an 8.25% coupon to yield the tight end of 8.25%-8.50% guidance. “We are constructive on Cosan, and see any price above 8.00% as attractive and recommend buyers take this opportunity,” Juan Cruz, head of LatAm and EEMEA corporate credit research at Barclays, tells LatinFinance. With recently issued Brazilian perps Braskem and CSN trading back at par after periods of poor performance, investors say Cosan played it somewhat conservative by paying 8.25%. There is general bullishness on the company and its $12bn JV with Shell for ethanol production and distribution, underscored by recent ratings upgrades. The coupon matches Cosan’s existing perp, callable in February, though that bond and the outstanding 2017 will be put into the JV, while the new bond will sit at the holdco level. Proceeds are marked for repaying existing indebtedness and for general corporate purposes. Morgan Stanley, Credit Suisse and JPMorgan led the sale, done through the Cosan Overseas SPE vehicle. BB minus/Ba3 mall developer General Shopping is roadshowing a $100m NC5 perp through the middle of the week, via Bank of America Merrill Lynch and BTG Pactual.
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Repsol/Kuo Plot Renewable JV
Repsol and Grupo Kuo are jointly investing in a new 50/50 biofuel project in the Yucatan. According to Repsol, the Spanish oil company and the Mexican industrial conglomerate will together make an $80m equity investment in the new plant, known as KUOSOL, over the next several years, with each taking a 50% equity stake. The plant will produce biofuel from a jatropha plant. Repsol says the investment is part of its New Energy strategy to pursue technologies it can use to leverage its existing distribution network. The deal was privately negotiated, according to Kuo. Repsol says it will look for additional opportunities to expand the footprint of its New Energy unit in LatAm, potentially including additional JVs and acquisitions.
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Colombia Leaves Rates at 3.00%
Colombia’s central bank left the monetary policy rate unchanged at 3.00% as expected by the market. The bank cites lower-than-expected annual inflation of 2.28% and a strengthening of the local economy, which it expects to grow at around 4.50% in 2011, in line with expansion seen this year. Morgan Stanley expects Colombia to tighten to 6.00% by the end of 2011 while Barclays believes the rate will stay on hold until April.
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Digicel Taps CEO for Honduras
Jamaica-based cell phone company Digicel says it has appointed Damian Blackburn as CEO of its Honduras operations. Blackburn, who had previously been regional CEO overseeing 12 Caribbean markets, joined Digicel 2.5 years ago. He replaces Ghada Gebara, who left the company after 5 years to pursue private projects.
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Venezuela, DR Snag IDB Loans
The IDB has approved a $700m loan to finance the modernization of the turbines of Venezuela’s Guri hydroelectric project, increasing power by 795MW. Venezuela will contribute a total of $609m in counterpart funds to the project, which will have a total cost around $1.3bn. The IDB loan is for 20 years, with a 6-year grace period and an interest rate based on Libor. Separately, the IDB has approved a $120m loan to the Dominican Republic to help enhance competitiveness. The IDB financing consists of a $110m loan with an amortization of 20 years, a grace period of 5 years and an interest rate based on Libor. The other $10m loan has an amortization of 15 years, a grace period of 5 years and an interest rate based on Libor. The multilateral does not comment on the loan spreads.
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Dow Jones Launches Peru Indices
Dow Jones Indexes has launched the LATixx Peru Government PES Bond and the LATixx Global Peru Government USD Bond Indexes. The market-cap weighted indexes are designed to measure the performance of the Peruvian government’s local and global issues in PES and USD. Back-tested historical data is available from January 1 2009, with the base date of December 31 2008 and an initial value set to 1,000, Dow Jones says. As of September 30, the LATixx Peru Government PES Bond Index had a year-to-date performance of 3.49%. The LATixx Global Peru Government USD Bond Index rose 16.62% over the same period.
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BTG Diversifies Into Mexico Research
BTG Pactual has hired Julio Zamora to run a fledgling Mexico equity research and strategy effort. Zamora was previously MD at Cadogan Management and worked in several buyside and sellside roles before that. He is expected to hire another research analyst and possibly support staff for sales and trading. Zamora will be based in New York and reports to Brazil-based research co-heads Rodrigo Goes and Gustavo Gattass. BTG has established itself as a major Brazil equity player and is now looking to build elsewhere in the region. It wants to establish a local presence in Colombia and Peru by early 2011, and Chile and Argentina are other possibilities for expansion, say senior bankers at the firm. BTG recently hired Rafael Shin to support Alonso Aramburu’s Andean and Southern Cone research coverage.
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Colombia Rates Seen Steady
The market expects Colombia’s central bank to keep its monetary policy rate on hold at 3.00% today. Morgan Stanley says growth is in line with expectations and inflation remains below target. It expects the rate to tighten to 6.00% by the end of 2011. Barclays also sees the rate on hold with tightening beginning in April, although it says there is a risk it could begin later in the year.
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Jones Day Opening in Sao Paulo
Global law firm Jones Day is opening an office in Sao Paulo, from which it will handle all LatAm-related business. It already has an office in Mexico City. Luis Riesgo, chair of the LatAm practice, will move to Sao Paulo to serve as partner-in-charge of the new office. Riesgo served as partner-in-charge of the Madrid office of Jones Day for the last 5 years.