Mauricio Botelho, CEO of Embraer from 1995-2007, has acquired a 40% stake in Arsenal Financas. The boutique is the former corporate finance arm of Arsenal, whose asset management arm was sold to hedge fund Gavea Investimentos in September. “In the context that Brazil finds itself in today there are two areas that are going to see a tremendous amount of activity: infrastructure and retail,” Botelho tells LatinFinance. He points to the strong expected investments by the government and private sectors in everything from waste management to energy, and observes an expansion in real income by Brazil’s population that will inevitably fuel high consumption in the coming years. Still, there is no particular bias at the shop to a specific type of sector or M&A transaction, adds Botelho. The executive has paid an undisclosed amount for a 41% stake in Arsenal Financas. Another 51% is owned by co-founder Jose Eduardo Lacerda, a former Credit Suisse banker, while the remainder is held by other individuals. Botelho and Lacerda are joint managing partners of the boutique, which also has another 10 bankers. “The value we bring here is our independence and lack of bias other than providing a solution to our clients,” says Botelho, in a familiar claim by boutique bankers. “We don’t do financing or proprietary trading and we don’t have a fund,” he adds. The shop has executed more than 30 deals in the past 5 years and has several live mandates, says Botelho.
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Infrastructure Player Advances Bonds
The board of Brazilian infrastructure investor Invepar has approved the sale of BRL450m in debentures, and says in a regulatory filing that it expects to pay a fixed interest of 9.75%. The 2020 bonds are guaranteed by its Linha Amarela subsidiary and feature a 1-year grace period. Banco do Brasil is managing the sale. Invepar plans to pass down proceeds from the issue to Concessao Metroviaria do Rio de Janeiro, its subway operator subsidiary, so that it may refinance debt and acquire new train cars.
Aeropuertos Argentina Readies Local Tap
Aeropuertos Argentina is preparing to issue $150m in 2020 bonds in the domestic market. The airport operator is expected to price the new issue in the next two weeks, according to a company finance official. Banco Macro is managing the sale, rated Aa2 on a national scale. It is the first new bond since a $150m local and international issue in 2002. Proceeds from the sale will refinance $22m in bank loans and fund about $128m worth of capex projects, according to a Moody’s report.
Amil Eyes Additional Funds
The board of Brazilian health insurer Amil Participacoes has approved plans to sell a BRL150m bond in the local market. The one-year debenture is expected to pay 109.5% of the DI benchmark. In January Amil sold BRL300m in one-year bonds at 109.75% of the DI to help finance its acquisition of Medial Saude, in a transaction lead by Itau and HSBC.
Hypermarcas Accelerates M&A Spree
Hypermarcas has clinched MOUs to acquire 3 more brands in Brazil, bringing the number of acquisitions announced in the past week to 4 with a combined value of more than BRL450m. The consumer brands company says it has agreed to buy Facilit, a dental hygiene specialist that owns the Sanifil brand; York, which makes cotton swabs and related items, for a combined BRL179m; and drugmaker Luper, for $52m. The company, which last week announced its plan to acquire its third diaper maker company Sapeka for BRL225m, is also planning to raise up to BRL1.25bn in new equity later this month with proceeds exclusively earmarked for M&A. Facilit posted gross revenues of BRL62.7 in 2009 and will cost Hypermarcas $79m, 60% of which will be paid up front with the remainder to be paid in 5 equal annual installments. York earned BRL63.3m in 2009 and is selling for BRL100m, to be paid for up front following due diligence. Luper made BRL44.6m last year.
Mexico Sponsors Bid for Road Package
Mexico’s government is set to open bids today for the Northeast toll road package, the next in the line of the group popularly known as Farac. Seven bidders are said to be in the hunt for the 30-year concession, including locals Ideal and ICA, and notable foreigners such as Brazil’s CCR and Spain’s OHL. The package includes two roads and three bridges in the states of Nuevo Leon and Tamaulipas. An official estimate of the package’s value has not been given, though it is thought to be worth at least $300m-equivelant. The Northeast package, the Mitla-Tehuantepec package, the Lerma Tres Marías cluster, the Pacific South and the Chihuahua and Valles-Tamuín beltways projects on offer this year are estimated to require a total investment of around MXP10bn.
GMAC Mexicana Readies ABS
GMAC Mexicana has completed investor meetings for a MXP1.45bn auto-loan securitization, and is preparing to price later this month. The 2015 bond is backed by a pool of 15,221 auto loans totaling MXP1.9bn with an average life of 1.3 years. The sale is expected March 24, according to a report from Scotia Capital, and is the first pure securitization of auto loans in Mexico, according to officials managing the deal. Banamex and HSBC are managing the sale, expected to be rated AAA on a national scale. The offer will also include a MXP245m subordinated piece, rated A, that GMAC plans to hold on to.
Brazil, Mexico Converge Via CME
LatAm’s 2 biggest exchanges will soon be connected through a single trading platform, thanks to a deal by the Chicago based-CME Group to bring Mexico’s Bolsa onto its Globex system. With Brazil’s BM&FBovespa already plugged into Globex, which stretches across 85 countries and boasts 120,000 active users, and the Mexican exchange soon to come online thanks to a deal announced Monday, a new intra-regional flow between LatAm’s liquidity centers will be established. Bryan Durkin, COO of CME, tells LatinFinance the focus of the new efforts has been to foster interconnectivity with all of its clients, but notes the linkup does provide an unprecedented link between Brazilian and Mexican investors. “A number of investors in Brazil have expressed strong interest in Mexico,” says Durkin. CME Group has agreed to purchase a 1.9% stake in Mexico’s stock exchange, the BMV, for $17m. The agreement is similar to a 2008 deal between CME and the BM&FBovespa that involves mutual order routing into and out of both exchanges, as well as an asset swap with commensurate board participation by the CME on the local exchanges. The deal also includes Mexico’s derivatives exchange MesDer.
Banks in Dead Heat for ECM, DCM Lead
In capital markets, the race for leadership in has been far tighter than in the M&A and investment banking fees rankings, according to Dealogic data. On the debt side, BofA-Merrill edges out JPMorgan, with $1.65bn across 6 deals, according to data through March 5. JPMorgan’s $1.57bn via 6 deals tops Banco do Brasil’s $1.4bn across 5 transactions. In the year-ago period, the DCM rankings were led by HSBC, JPMorgan and Citi, with 7, 2 and 3 deals, respectively. On the ECM side, Brazilan shop BTG Pactual narrowly beats Credit Suisse and Bradesco, respectively, for the top spot. The startup, which had a strong 2009 as well, has underwritten $361m via 3 deals, versus $322m for CS, also through 3 deals. The two will have to contend with strong competition from the likes of Santander and BofA-Merrill, the latter of which has 4 deals scheduled to price in the coming months. The rankings are also likely to be dictated by institutions’ ability to score lead roles on upcoming issuances by Petrobras, Eletrobras, OSX and potentially EBX, which could add up to dozens of billions of dollars in issuance this year.
Daycoval Set to Price
Banco Daycoval is set to price a 2015 bond today, after giving 6.750%-6.875% guidance. The mid-size Brazilian bank, which wrapped up marketing yesterday, is expected to issue $200m-$250m in size. Itau, Morgan Stanley and Santander are managing the sale, rated BB. The bank’s last dollar bond was a $100m 7.25% of 2011, sold in July 2008 through HSBC, Itau and Banco Votorantim.