After securing last year the international borrowing needed to fund 2010, Peru could return to international markets to pre-finance 2011, the finance ministry says. It would do so “anticipating potential turbulence in an election year.” The sovereign adds that it would consider issuing in a currency other than dollars if the cost was significantly more attractive. Peru will hold presidential elections in 2011. As for internal debt, the government plans to sell PES4.12bn this year, including PES2.07bn to finance its needs and the remainder under a special law allowing it to help fund regional governments’ infrastructure projects. It adds that it wants to strengthen domestic benchmarks, and that it will prioritize its 2042, 2031 and 2020 maturities. Last year in the dollar markets, the Baa3/BBB minus issuer sold $1bn in 7.125% of 2019 bonds in March. It reopened $1bn in 7.350% of 2025s in July. Peru filed a $5bn shelf with the SEC last month.
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Credit Suisse Poaches JPMorgan Banker
Credit Suisse has hired Guido Cerini, former MD and head of LatAm natural resources at JPMorgan, according to people familiar with the matter. He is expected to start at the Swiss bank mid-May as a New York-based MD covering oil and utilities. “He is a very good energy and power banker. He was very active,” says an M&A specialist at a competing bank. Cerini, an Argentine national, is currently on gardening leave. JPMorgan declines to comment.
Brazil Bank Drops Off Renova IPO
Brazilian renewable energy specialist Renova has launched its IPO with an offering document published in local papers. The company is targeting a March 17 sale of up to 33.7m primary units that could yield as much as BRL741m. Updated materials show Santander and BofA-Merrill as joint-lead bookrunners. Renova no longer names Itau BBA, which was listed as the deal’s third bank in a prospectus filed earlier this year with the CVM. Bankers on the deal offer a variety of explanations for the departure of the Brazilian bank. Executives familiar with Itau BBA’s view suggest disagreements on timing of the deal led it to walk away. Meanwhile, executives away from Itau BBA suggest the shop may have chosen to purse another mandate that was contingent on it quitting Renova. In either case, Itau was third bank and likely stood to earn weakest economics on the deal. Santander is lead coordinator and BofA-Merrill is stabilizing agent. Through its project finance units and an infrastructure fund called Infra Brasil, Santander has several business ties with Renova. Renova has recently won a series of wind energy blocks to develop via a large government auction and is seeking capital for those and new projects by issuing primary stock. The offering is made up of 24.7m shares plus a 3.9m unit greenshoe and a 5.1m unit hot issue. The price range is BRL19.00-BRL25.00.
Ex-RBS DCM Bankers Form Boutique
A former RBS DCM team led by Pablo Venturino has set up a new structuring and asset management business, White Bridge Capital Management. Based in New York and Buenos Aires, White Bridge will focus on 2 of the team’s specialties, trading and structured trades. It will also gradually venture into Asset Management, Venturino, MD and fund partner, tells LatinFinance. “Structuring was our bread and butter, and we knew that there was also an opportunity for us in trading,” Venturino says. The business will cover LatAm clients including governments, government institutions and banks, and involve various debt products and other instruments like swaps. Building asset management is a longer process. Thus far, a White Bridge Chilean Fund is being marketed to Argentine investors. It aims to take advantage of Chilean tax-exemptions to target several Chilean and international asset classes. It should close by the end of the year and is targeting up to $500m. The shop also has a special situations fund able to make a broad range of mostly short-term investments. Venturino is joined by former ABN/RBS bankers David Pinto and Orlando Alvarado, also as MDs. Hans Hertell, ex-US ambassador to the Dominican Republic, and Dario Ventimiglia, a former LatAm president at Telecom Italia, joined as fund partners. Professionals in the Buenos Aires office include former ABN LatAm energy head Mariano Gilles, as well as Alejandro Pueyrredon, Alexis Tchubarov and Ferdinand Porak. The BA office opened in January and the New York branch opened in August. A Venezuela office, targeting private banking clients, should also open this year. Venturino’s former team at RBS, which also included MD Carlos Vargas and director of loans Boris Espinoza, opted to take a buyout package in June. This followed deteriorating support for LatAm DCM and syndicated loans as the Scottish bank suffered through the credit crisis.
Clarification: Camargo Syndicates BRL Jumbo
A February 25 brief entitled “Camargo Syndicates BRL Jumbo” provides an incomplete listing of M&A advisors to Camargo Correa. Credit Suisse and BofA-Merrill are co-advisors to Camargo.
Jamaica Gets IDB Support
The IDB has approved a $45m in loans for Jamaica to enhance the country’s education system. A $30m loan will support improvements in school infrastructure and teacher training, while a $15m facility will be used to expand compulsory education to 18 years from 16 and to build 2 secondary schools for up to 2,100 students. The loans have a 20-year term, with a 5-year grace period on the larger and 3 years’ grace on the smaller. Another $30m loan is expected to be approved in 2012, the IDB says.
Colombia Rates Stay Put
As widely expected, Colombia’s central bank left its monetary policy rate unchanged at 3.5%. The bank says annual inflation is still within the target range of 2.0%-4.0%, although it did increase to 2.1% in January from 2.0% in December. Morgan Stanley believes the bank is likely to begin hiking the rate in Q3. Bulltick sees rates unchanged until the end of the year.
Barclays Ups Mexico GDP Forecast
Barclays has improved its forecast of 2010 GDP growth in Mexico to 5.5% from 5.0%. The change comes after the country saw a strong 8.4% quarter-over-quarter seasonally adjusted expansion in Q409, a 2.8% month-over-month gain in imports so far this month, and a still-robust outlook for manufacturing in the US, the shop says. Bank of America-Merrill Lynch (BAML) last week boosted its forecast for Mexico’s GDP growth to 4.0% in 2010, an improvement of its previous forecast of 3.0%. Goldman Sachs improved its 2010 GDP growth forecast to 5.0% from 4.2%. Mexico’s treasury last month revised upwards its GDP growth projection for 2010 to 3.9% from 3.0%.
LatAm Equity Flows Revive
LatAm equity funds snapped a 4-week losing streak in the week ended February 24, says EPFR Global, with flows into Brazil equity funds hitting a 5-week high. Inflows to Mexican equity funds are at an 18-week high, adds the fund tracker. Meanwhile, GEM equity funds absorbed the biggest share of the $915m taken in by all dedicated EM equity funds, it adds. However, LatAm equity funds’ performance slipped 3.01% in the week ended February 25, bringing it down by 7.55% YTD, according to Lipper. EM funds were also in the red, slipping 2.45% in the week and 5.61% YTD. Global small and mid-cap funds dropped 1.14% in the week and 2.34% YTD.
EM Bonds Attract Flows
EM bond funds’ inflows year-to-date moved north of $3.5bn in the week ended February 24, says EPFR Global. As for performance, EM debt funds rose 0.31% in the week ended February 25 and are up 0.79% year-to-date, Lipper data show. Meanwhile, global income funds made 0.44% in the week and are up 0.91% ytd, while international income funds have returned 0.49% in the week but lost 0.03% ytd.