Minerva Shrinks, Discounts to Finish Convert Deal

Minerva’s convertible debentures priced below the range, to raise BRL190m ($121.17m), less than the BRL300m it had targeted. In what was thought to be the Brazilian market’s first-ever public sale of mandatorily convertible debentures, the meatpacker shrunk the number of 2015 notes to 200,000 from 300,000, and priced below the 97-103 range at 95. The interest rate – 100% of DI – and conversion price range – BRL6.00-BRL8.00 – were established prior to bookbuilding. Shares closed at BRL5.39 Thursday. The deal was fortunate to get done, after leads extended the bookbuilding period by one day as demand sagged in markets around the globe. Most issuers of late, including Brazilian Copersucar, and Uruguay’s Union Agriculture Group, have had to cancel equity deals, and nobody else in the region has launched. ECM bankers expect a lull in the new issuance market, until there is more clarity on the US debt situation, the euro-zone debt problems and more stability is seen in Brazil’s domestic market. Though the equity pipeline has been healthy all year, the bankers report shrinking backlogs of yet-to-be-announced transactions. Minerva plans to use the proceeds to repay existing debt, and for working capital. Minerva is rated BBB minus on a national scale. Goldman Sachs, Deutsche Bank and Banco do Brasil were leads.