CSN Plots Buyback, Frets ADR Hedge

Brazilian steelmaker CSN plans to spend up to BRL410m on repurchasing as much as 10.8m shares. The program will last until October 29. CSN has 455.34m shares outstanding, which closed at BRL38 Monday, down from BRL44 Friday. Separately, falling prices of CSN ADRs could lead to significant losses on swaps tied to their price, JPMorgan says in a report. “The company has had substantial gains in this swap – around $300m in H108 alone. However, given that CSN’s ADR price has already plunged about 45% in 3Q08, we estimate that the noncash losses on this instrument may be up to $600m,” the bank says. CSN says it has made a net positive position of $845m since 2003 on the swap contract, which it renewed in July.