5 de mayo de 2015 / 15:28 / en 3 años

Votorantim Cimentos preps euro trade

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.

On the downside, corruption investigations have impacted the company, one among many cement companies fined for price-fixing, according to Moody‘s.

The company, which denied the allegations and is appealing the imposed sanctions, is expected to sell assets as a result, the agency said.

This comes amid speculation that the Brazilian sovereign may also tap the international markets to assist corporates in their capital raising efforts, though some bankers believe spreads are not yet tight enough.

Brazil’s 2025s were trading 25 cents higher at a mid-market price of around 98.45, still off the recent high of 101.125 seen on April 24, according to Thomson Reuters data.

“I am surprised the (Brazilian) sovereign hasn’t announced anything,” said a New York-based trader.

“If they come to market, they will be doing a big favor for the rest of corporate Brazil.”


Chile could soon return to international capital markets with a new bond deal after sending requests for proposal to banks earlier this month, according to three sources with knowledge of the situation.

The sovereign, rated Aa3/AA-/A+, is expected to raise at least US$1bn-equivalent through the deal, which could materialize as soon as this week, one of the sources said.

Votorantim Cimentos (Baa3/BBB/BBB) has mandated Citigroup, Deutsche Bank, HSBC, Banco Votorantim, BB Securities, Bank of America Merrill Lynch, MUFG and Santander GBM to arrange a series of investor meetings ahead of a potential euro-denominated bond issue.

The meetings will continue in London today, and in Amsterdam and Paris on Wednesday.

JB y Compania SA de CV (Jose Cuervo) kicked off meetings last week through Bank of America Merrill Lynch and Citigroup as it seeks to market a possible senior unsecured US dollar bond.

The borrower will head to New York on Tuesday. The spirits company, rated BBB/BBB by S&P and Fitch, is the world’s largest tequila producer.

Pacific Rubiales, the largest private oil producer in Colombia, has kicked off investor meetings through Bank of America Merrill Lynch, Citigroup and HSBC. After visiting Los Angeles on Monday, the company will be in Miami on Wednesday. (Reporting by Paul Kilby; Editing by Marc Carnegie)

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