LatinFinance - September/October 2013 - 61

foreign investors is limited, says Zoffmann.
“When you don’t have this incentive,
it does not make any difference for
an international investor buying an
infrastructure debenture or a normal
debenture. So now you have a competition
between these two instruments,” he says.
“The decrease of the IOF was not a good
thing [for debentures].”
Janszky points out that foreign
participation in debentures has anyway
been disappointing. “The infrastructure
debentures have so far had some success
domestically, but virtually no traction in the
foreign markets,” he says.
But the government insists this will
change. “We are working intensely with
the capital markets,” Siffert says. “The
perspective we have is to have more
origination of debentures by the end of the
year and next year. It is going to become a
good investment opportunity.”
Authorities will push hard for more
debenture issuance “across the board in
infrastructure, in order to attract resources
from domestic and foreign investors to
support the funding for infrastructure
projects,” he adds.
A declining interest rate environment

would help this goal. “If the Selic
[benchmark rate] converges towards
the TJLP, this is going to be even more
attractive.”
However, the Selic rate was raised to 9%
in August, widening the gap with the TJLP,
at 5%.
The government nevertheless has
focused much effort on risk in order to
respond to investors’ concerns. Armed
with up to 11 billion reais, the Agencia
Brasileira de Gestão de Fundos e Garantias
(ABGF) guarantee agency has been
established to address some of the big
risks, such as non-completion risk as
well as some of the construction and
environmental risks.
“The view seems to be that the
government is reluctant to grant a ‘market’
rate of return on many concessions,”
Janszky says. “So if equity players can’t get
an adequate return, how can you finance
such a project, the critics ask?”
The official response has been
inconsistent, Zoffman says. “In some cases
they have been pragmatic, in other cases
they have not,” he says.
“It was quite impressive the way they
changed all the port legislation very fast

THE

[earlier this year]. We will have probably
have some public biddings by the end of
December, and that’s a great thing. They
worked very fast with a very pragmatic
approach here.”
On the other hand, Zoffmann says
doubts continue to hang over other
projects. “I am not convinced that the
railways will have all the success the
government is expecting,” he says.
Another big question mark is the impact
of currency volatility. The real was at 2.30
per dollar in early September, up from
2.05 at the beginning of the year.
However, Luciano Coutinho, president
of the BNDES, tells LatinFinance that this
will not hamper the auctions.
“These concessions are long term
commitments, in [Brazilian] real. These
projects are financed and structured
in reais, Brazilian operators and
entrepreneurs are ready to seek these
opportunities – in several cases in
partnership with foreign operators in
terms of direct investment (in equity),”
he says.
“I have quite eloquent evidence of the
commitment of these investors in the longterm perspective.” LF

Bahamas Advantage

September/October 2013 - L ATINFINA NCE.COM 61


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LatinFinance - September/October 2013

Table of Contents for the Digital Edition of LatinFinance - September/October 2013

Latin Finance - September/October 2013
Contents
Front notes
People news
Debt news
Equity news
M&A news
After the storm
Advantage Mexico
Treading water
New structures
Mexico
Regaining the Initiative
Deficit Ahead
Building up
Switching Course
Brazil
Work in progress
Extreme makeover
Mind the gap
Brazilian life insurance
Andean
Breaking the fall
Reaching out
Market movers
Paraguay
Smoothing the cycles
Thinking big
Parting Shot
LatinFinance - September/October 2013 - Latin Finance - September/October 2013
LatinFinance - September/October 2013 - Cover2
LatinFinance - September/October 2013 - Contents
LatinFinance - September/October 2013 - 2
LatinFinance - September/October 2013 - 3
LatinFinance - September/October 2013 - Front notes
LatinFinance - September/October 2013 - 5
LatinFinance - September/October 2013 - People news
LatinFinance - September/October 2013 - 7
LatinFinance - September/October 2013 - Debt news
LatinFinance - September/October 2013 - 9
LatinFinance - September/October 2013 - Equity news
LatinFinance - September/October 2013 - 11
LatinFinance - September/October 2013 - M&A news
LatinFinance - September/October 2013 - 13
LatinFinance - September/October 2013 - 14
LatinFinance - September/October 2013 - 15
LatinFinance - September/October 2013 - 16
LatinFinance - September/October 2013 - 17
LatinFinance - September/October 2013 - 18
LatinFinance - September/October 2013 - 19
LatinFinance - September/October 2013 - 20
LatinFinance - September/October 2013 - 21
LatinFinance - September/October 2013 - 22
LatinFinance - September/October 2013 - 23
LatinFinance - September/October 2013 - After the storm
LatinFinance - September/October 2013 - 25
LatinFinance - September/October 2013 - Advantage Mexico
LatinFinance - September/October 2013 - 27
LatinFinance - September/October 2013 - Treading water
LatinFinance - September/October 2013 - 29
LatinFinance - September/October 2013 - 30
LatinFinance - September/October 2013 - New structures
LatinFinance - September/October 2013 - 32
LatinFinance - September/October 2013 - 33
LatinFinance - September/October 2013 - 34
LatinFinance - September/October 2013 - 35
LatinFinance - September/October 2013 - 36
LatinFinance - September/October 2013 - 37
LatinFinance - September/October 2013 - 38
LatinFinance - September/October 2013 - 39
LatinFinance - September/October 2013 - 40
LatinFinance - September/October 2013 - Mexico
LatinFinance - September/October 2013 - Regaining the Initiative
LatinFinance - September/October 2013 - 43
LatinFinance - September/October 2013 - Deficit Ahead
LatinFinance - September/October 2013 - 45
LatinFinance - September/October 2013 - Building up
LatinFinance - September/October 2013 - 47
LatinFinance - September/October 2013 - 48
LatinFinance - September/October 2013 - 49
LatinFinance - September/October 2013 - 50
LatinFinance - September/October 2013 - 51
LatinFinance - September/October 2013 - Switching Course
LatinFinance - September/October 2013 - 53
LatinFinance - September/October 2013 - 54
LatinFinance - September/October 2013 - 55
LatinFinance - September/October 2013 - 56
LatinFinance - September/October 2013 - Brazil
LatinFinance - September/October 2013 - Work in progress
LatinFinance - September/October 2013 - 59
LatinFinance - September/October 2013 - 60
LatinFinance - September/October 2013 - 61
LatinFinance - September/October 2013 - Extreme makeover
LatinFinance - September/October 2013 - 63
LatinFinance - September/October 2013 - 64
LatinFinance - September/October 2013 - 65
LatinFinance - September/October 2013 - 66
LatinFinance - September/October 2013 - Mind the gap
LatinFinance - September/October 2013 - 68
LatinFinance - September/October 2013 - 69
LatinFinance - September/October 2013 - Brazilian life insurance
LatinFinance - September/October 2013 - 71
LatinFinance - September/October 2013 - 72
LatinFinance - September/October 2013 - Andean
LatinFinance - September/October 2013 - Breaking the fall
LatinFinance - September/October 2013 - 75
LatinFinance - September/October 2013 - 76
LatinFinance - September/October 2013 - Reaching out
LatinFinance - September/October 2013 - 78
LatinFinance - September/October 2013 - 79
LatinFinance - September/October 2013 - 80
LatinFinance - September/October 2013 - 81
LatinFinance - September/October 2013 - Market movers
LatinFinance - September/October 2013 - Paraguay
LatinFinance - September/October 2013 - Smoothing the cycles
LatinFinance - September/October 2013 - 85
LatinFinance - September/October 2013 - Thinking big
LatinFinance - September/October 2013 - 87
LatinFinance - September/October 2013 - Parting Shot
LatinFinance - September/October 2013 - Cover3
LatinFinance - September/October 2013 - Cover4
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