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
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
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
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 points.
"Brazil’s local 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
Brazil’s 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 or another."
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 said.
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