Panamericano Quashes BVA Bond

Fallout from Banco Panamericano’s regulatory troubles has forced Banco BVA to postpone a 2013 bond it had begun marketing last week, according to investors. Concerns over the troubled mid-sized Brazilian bank are casting a bad light over the entire sector. BCP Securities and UBS had been managing the B2 rated deal, expected by the market at under $500m. Last week, Panamericano announced it would receive a BRL2.5bn emergency capital injection by its controlling shareholder, Grupo Silvio Santos, following the discovery of “inconsistencies . . . that do not allow the financial statements to reflect the entity’s true state of assets,” according to the bank. Panamericano has since fallen under criminal investigation, according to prosecutors. While so far no accounting irregularities have been found at BVA or any of Panamericano’s other peers, investors have indicated that a repricing may be in order for new dollar issuance from the sector, which had been getting attractive rates from a limited but enthusiastic investor base.