April's $750 million bond issue to replace existing debt,
Brazilian builder Construtora Norberto Odebrecht plans to
continue seeking liability management opportunities. However,
the attractive rate environment that has brought so many
issuers to market may be coming to an end, its CFO says.
have an opportunity to issue less expensive debt and longer
debt we aim to maybe access the market again," Jayme Fonseca
told LatinFinance. "You never know, yields
are going so low, but until today we are not expecting to have
yields lower than the last transaction that we just
as US treasuries experienced a volatile week, due to concern
that the government may begin curtailing its measures to
stimulate the economy, initiating a rise in rates. Some LatAm
issuers hoping to access the market, such as
Minerva, have elected to wait.
market is] talking about lowest-ever prices, everybody is
trying to issue a transaction at those levels," he says. "I'm
not sure if those levels are achievable right now."
CNO plans to
keep its gross debt at 2.5x Ebitda, Fonseca said.
demand, new instruments and a government push will inject
much-needed energy into Brazil's infrastructure development,
which has disappointed sharply in recent years, Fonseca said.
The country has the right mix of elements for infrastructure
projects to take off, despite a slow two years.
that during the course of this second semester of 2013 we might
have some good news coming from the economy. We have already
new legislation about the ports in Brazil, we have the
infrastructure debenture instruments," he said.
debentures will spur financing for development that needs to
happen to satisfy not just future demand, but current demand,
dire need for yield in the domestic market is likely to channel
cash into infrastructure, he said, speaking ahead of the
central bank's decision on Wednesday to raise rates by 50 basis
interest rates have never been so low, ever," Fonseca said.
"People inside the country are looking for yield as well. We
have Brazilian pension funds, Brazilian insurance companies,
Brazilian people, normal people looking for yield. Normally
infrastructure is a natural place to put cash from pension
funds, insurance companies and people as well. … This
combination of real demand plus some measures the government is
taking and this look for yield in Brazil, we have the right
combination to put infra investment in place."
government is moving in the right direction: "Our government
made the decision to be more friendly and to attract investors
as much as possible. This is good news. In the long run, if the
target is the correct target we're going to get there one way
30% of its revenues in Brazil, less than the 40% to 45% it had
forecast two years ago. "We believe the government of Brazil is
doing the right job, at least in the right direction.
Unfortunately they're taking longer to take the decisions," he
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