Latin Finance - July 2008 - (Page 4)

Debt Brazilian High Yield Returns Brazilian Double B corporates have steadily crept back to debt markets, taking advantage of the second investment grade endorsement for the sovereign. Investors have shown appetite, but issuers are expected to face stiff competition from US high yield and other EM regions. US yields can often be much higher because of a significant repricing related to the credit crunch. In this environment, investors remain cautious and selective. “Issuers in a unique industry offer diversity, and investors like that,” says Arif Joshi, a portfolio manager at HSBC Halbis who helps manage more than $1 billion in LatAm debt. Mexico-based cement multinational Cemex scored a major coup He adds that oil services provider Lupatech – which last in the debt markets by raising a $1.05 billion perpetual bank month reopened the perpetual bond market with a tap of its loan, understood to be the first of its kind from LatAm. The 9.875% Ba3 perp for $75 million via Citi and Merrill Lynch – is a seasoned visitor to the markets has issued perpetual bonds in diversification play on Petrobras. The market is not back to the past, with the latest tap for €730 million in May. With a where it was 18 months ago, he cautions, and issuers could face perpetual loan, however, the accounting treatment is untested. competition for investor attention from an expected glut of EM Structuring agent HSBC led a club of banks, including high yield from countries like Russia. Santander and RBS as joint lead Brazilian beef producer Arantes arrangers and bookrunners and ING DCM Rank by Volume, Year to June 23 Alimentos joined the comeback by and Caja Madrid as MLAs. The deal BBVA Builds Higher pricing $150 million in 2013 bonds pays Libor plus 100 basis points in with a 10.250% coupon at 99.046 to the first 18 months, 200 basis points Rank Bookrunner Value $m # deals yield 10.500%. The B2-rated issuer in months 18-36, and much higher 1 Deutsche Bank 3,992.61 9 will use proceeds to repay a portion levels after year five. 2 BBVA 2,570.33 26 of short-term debt, as well as for In Mexico local markets, retailer 3 Credit Suisse 2,464.28 11 capital expenditures and general Organizacion Soriana priced a 5.5 4 HSBC 2,448.23 19 corporate purposes. Credit Suisse billion 2012 peso bond at 43 basis 5 Barclays Capital 2,329.06 2 and Santander managed the sale. points over 28-day TIIE, a standout 6 Citi 2,035.40 17 Earlier, petrochemicals producer in a year which so far has seen 7 Santander 1,667.11 22 Braskem placed $500 million in new mostly 1-2 billion peso transactions 8 JPMorgan 1,420.87 6 7.250% 2018 bonds to yield 7.375%, from corporates. Proceeds will help 9 Scotia Capital 924.00 7 surpassing expectations of $400 pay down bridge debt used for the 10 RBS 853.44 2 million. Demand for the BB+/Ba1 $1.35 billion purchase of rival Subtotal 20,705.34 97 offering via ABN AMRO, Calyon and Grupo Gigante in December. Total 34,147.93 256 Citi, exceeded $1.7 billion. Proceeds Soriana is heard eyeing a 4.5 Source: Dealogic will be used to pay down part of a billion peso placement around $1.2 billion bridge raised last year September to complete the takeout from the same three banks to finance the acquisition of stakes in of the bridge. Demand for the AA locally-rated deal from competitors Ipiranga and Copesul. Banamex, Inbursa and JPMorgan was heard at 10.2 billion “The spread over Treasuries [328.5 basis points] was very pesos. close to what some investment grade issuers have recently paid [for that tenor,]” CFO Carlos Fadigas tells LatinFinance. He adds that Braskem plans a pre-export syndicated loan to complete the Brazilian steelmaker Usiminas is looking to raise $400 million in takeout. new financing through an IDB A/B structure. The multilateral is As LatinFinance went to press, Brazilian rice producer Camil heard to be providing the company with a $50 million nine-year A loan. For the $350 million syndicated B portion the company Alimentos was set to try its luck with a $150 million mediumterm issue through ABN and Santander. The BB-/Ba3 Camil has is targeting tenors of seven years. An RFP is out to banks for a mandate to lead the syndication. Proceeds are being used to been expanding in Brazil and Uruguay through acquisitions. increase Usiminas’ energy efficiency. LF in February with Deutsche Bank and Morgan Stanley, which managed the sale. Jamaica plans to raise about $600 million this year in international capital markets. Panama meanwhile got $478 million in reopened 9.375% of 2029 bonds issued to holders of its 9.625% of 2011 and 9.375% of 2012s in an exchange offer. The transaction aimed to get investors into more liquid points on the curve, and immediately followed a $235 million tap of the 7.25% of 2015 bonds. Citi and Deutsche managed both. Cemex Gets Perpetual Loan Usiminas Eyes Return to Loans Sovereigns See Opportunity Looking to head off €200 million due February and other maturing debt, Jamaica priced $350 million in new 2019 bonds with an 8.000% coupon at 97.498 to yield 8.375%. The B/B1 issuer had hinted at a tap when it went on a non-deal roadshow UPDATE For daily DCM news and an exclusive pipeline of debt deals see www.latinfinance.com 4 LATINFINANCE July/August 2008 http://www.latinfinance.com

Table of Contents Feed for the Digital Edition of Latin Finance - July 2008

Latin Finance - July 2008 Contents Investment Banking Outlook Compensation Survey Colombia Investment Banking Borrowers vs. Investors Banorte Profile Braskem Financing Strategy Brazil Hydro Finance Peru Port Privatization Panama Money Flows Argentina Local Markets Guide to Banking Technology Who Said That?

Latin Finance - July 2008

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