Votorantim Cimentos preps euro trade

martes 5 de mayo de 2015 11:24 GYT

By Paul Kilby

NEW YORK, May 5 (IFR) - Latin American credit markets were largely drifting in early trading Tuesday ahead of a potential pick-up in primary activity in both the USD and EUR markets in the coming weeks.

Brazilian cement firm Votorantim Cimentos, rated Baa3/BBB/BBB by Moody's, S&P and Fitch, announced a new seven-year benchmark euro trade to be priced as early as Thursday.

It would be the country's first cross-border bond sale of 2015 and should encourage other Brazilian entities to follow suit and raise capital before a possible US rate hike this year.

"Everyone is looking at this one," said a banker.

"There are a lot of Brazilian companies seriously looking at accessing the market. These guys didn't have a chance of coming in the first quarter, and now there is more credible evidence that US rates will go higher."

Earlier Tuesday, yields on the 10-year US Treasury hit 2.18%, their highest level since early March, as investors await the release of non-farm payroll numbers on Friday.

The Votorantim Cimentos deal is expected to be leverage-neutral as proceeds will be used to refinance existing debt, Moody's said.

As positives, the rating agency cites the company's strong credit metrics and importance to parent Votorantim Industrial, to which it contributed about 49% of total Ebitda generation last year.   Continuación...