SÃO PAULO, Brazil - Six months ago, stocks and bonds in Brazilian companies were practically left for dead.
Brazil was sinking deeper into a recession. Its currency, the real, was reeling. And the country′s largest company, the government-controlled energy giant Petrobras, was embroiled in a corruption scandal that drew in politicians and weakened the government of President Dilma Rousseff.
Things have changed in six months.
Although Brazil is still recovering from its economic malaise, the nation′s major companies are attracting investors again. In recent months, President Rousseff has taken steps to cut the budget deficit. And in an unlikely twist, Petrobras itself is emblematic of the turnaround after it sold $2.5 billion in bonds with a 100-year maturity.
Brazil, the world′s seventh-largest economy, still faces hurdles. Investors have lost billions in Brazilian companies that are under investigation in possible securities law violations.
The real has dropped nearly 40 percent against the dollar in the last year, adding to losses for foreign investors. Inflation is still more than 8 percent. And should the government′s current progress in stabilizing the national debt falter, fears of a ratings downgrade could again send the currency plunging.
But, cautiously, some companies are tapping the public markets. Once new management took over in February, Petrobras - the world′s most indebted energy company, with about $130 billion in debt - moved quickly to build cash reserves. In the last two months, it raised more than $11 billion from the China Development Bank, the Standard Chartered Bank and three Brazilian banks.
Petrobras also finally restated its third- and fourth-quarter balance sheets. Those updated books allowed the company to again tap the global bond markets, which it did with the offering Monday. In a reflection of its weakened financial position, Petrobras paid a high price: a yield of 8.45 percent. But the offering was successful, even though analysts had modest expectations.
The strong demand for Petrobras′s so-called century bond may confirm that investors are willing to lend to and invest in Brazilian companies.
In early May, the Brazilian subsidiary of the Spanish telecom giant Telefónica issued new shares and raised $1.4 billion to help finance its acquisition of Vivendi′s Brazilian telecom unit.
In other signs of a turnaround, a local insurance brokerage firm, Par Corretora, held an initial public offering on Tuesday, the first Brazilian company to do so in almost eight months. It raised a modest $190 million, but that exceeded the high end of its target range, as a surge in demand led it to raise its share price.
"The success of recent offerings shows that there is a demand for quality names," said Jean-Marc Etlin, chief executive of the Brazilian investment bank Itaú BBA.
More transactions are considered likely soon. The reinsurance company IRB-Brasil is expected to file for an initial public offering, seeking to raise $1.3 billion. Another large bank, Caixa Econômica Federal, said in April that it was looking to hire investment banks to spin off its insurance division this year in an I.P.O. that could raise $3 billion.
The government of Brazil has an interest in helping to elevate the capital markets. IRB and Caixa Econômica Federal’s insurance division are partly owned by the government, which is eager to raise new money to close a gaping budget deficit. Brazil′s deficit is 7.5 percent of its gross domestic product. The deficit of crisis-ridden Greece was 3.5 percent of G.D.P. last year.
"The government, given its need for money, will probably be aggressive about opening capital in the companies it owns," said Eliana Chimenti, senior partner for capital markets at the São Paulo law firm Machado Meyer.
Stock offerings by privately run companies will probably still take time, because most are waiting to see more improvements in the economy and stock prices. Murilo Ferreira, chief executive of the mining company Vale, said in April that the firm was "working to have everything ready" to sell a stake in its $30 billion base metals division through a listing on the Toronto Stock Exchange. But, he said, a decision had not yet been made.
But local bankers still say several deals that were filed, then pulled, might return. For instance, Azul Brazilian Airlines, controlled by the JetBlue founder David Neeleman, is expected to again file for an I.P.O., after it withdrew such plans three times.
Petrobras, too, is not done fund-raising. It announced in March that it intended to raise $13.7 billion through asset sales.
Some $4 billion is expected to come from selling offshore petroleum reserves. Petrobras´s chief financial officer suggested in April that it might spin off its fuel distribution subsidiary, BR Petrobras Distribuidora. "Uncertainties have lifted enough that investors can see opportunities," said Renato Ejnisman, head of Banco Bradesco BBI. "There are good names available at good prices."
(The New York Times - BR - 03.06.2015)
(Notícia na Íntegra)
