BTG Pactual bonds stable as concerns over cash, asset sales ease

lunes 14 de diciembre de 2015 08:18 GYT
 

By Guillermo Parra-Bernal and Tatiana Bautzer

SAO PAULO Dec 14 (Reuters) - Grupo BTG Pactual SA bonds were barely changed on Monday, indicating the Brazilian investment bank is making rapid progress in efforts to sell assets and bolster cash only two weeks after the arrest of founder André Esteves.

In addition, securities industry watchdog CVM backed the bank's nearly completed plan to repurchase up to 10 percent of its shares in circulation. Regulators, however, rejected BTG Pactual's proposal to extend the buyback to the equivalent of 41 percent of outstanding shares.

Buyers of the bank's bonds and stock are slowly emerging after a two-week rout stoked by fears that the Nov. 25 arrest of Esteves in a sweeping corruption probe could ensnare Latin America's largest independent investment bank.

The start of an internal probe into what led to Esteves' arrest, and regulatory approval of BTG Pactual's stake in hospital chain Rede D'Or São Luiz SA to Singapore's GIC Pte Ltd have slowly fanned confidence on the bank. Still, traders said uncertainty lingered as it was still unclear whether BTG Pactual would be dragged into "Operation Car Wash," the graft probe that landed Esteves in jail, traders said.

The price on BTG Pactual's 4 percent bond due in January 2020 seesawed on Monday and last traded down 0.2 cent on the dollar at 56.5 cents from Friday. The 8.75 percent perpetual bond was unchanged at 54 cents, yielding 16.2 percent.

Units have fallen 57 percent since Nov. 24, the day before Esteves' detention. Their relative strength index reached 20 percent over the past 30 days, well below the 30 percent threshold where investors usually consider a stock oversold. (Editing by Lisa Von Ahn)