Brazilian to Test DCM

Brasil Foods is preparing to meet bond investors next week, becoming the region’s first credit to engage the buyside since the latest bout of Euro-driven market volatility. The meetings are initially on a non-deal basis, though the issuer is said to be revisiting a process started last year through which it was seeking funds. Expectations for new issuance have been mild since Mexico’s Banca Mifel issued May 10, as the potential borrowers await a more definitive indication of Greece’s remaining in the Eurozone. “The market is slightly more expensive, but the window is not closed. There are high-grade defensive credits getting deals done in other parts of the world,” says a New York-based DCM banker away from the deal. Rates are still low, and debt funds are still getting inflows, he adds. “There are 3 weeks until the Greek election and the markets knowing if a new government will be pro-EU. This outcome would cause liquidity to return, but we would need another 2-3 weeks until new issuance can return,” Diego Torres, corporate debt analyst at Santiago brokerage Munita, Cruzat y Claro, tells LatinFinance. Brasil Foods plans to visit London on Monday and Boston and New York on Tuesday, plus a call with US west coast investors. A recent upgrade gave Brasil Foods 3 of 3 investment-grade ratings, and the company has altered its structure through moves last year, including a regulator-mandated asset swap with Marfrig and a dairy acquisition. The company is updating investors following these changes, though, like many high-quality credits not in urgent need of funds, it is remaining ready in case a window opens. The protein exporter was heard last year looking for $750m at perhaps 10 years. Banco do Brasil, HSBC, Itau and Santander are managing the roadshow. Brasil Foods closed a $500m dollar and euro-denominated loan facility last month. Its last international bond issuance was in 2010, raising $750m at 10 years through Itau, JPMorgan and Santander.