STXNEWS LATAM-Brazil infrastructure firms buoyed by TJLP rate cut-BofA

Thu Dec 6, 2012 6:48am EST

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A decision by Brazil's government to lower a benchmark rate for subsidized corporate loans should bolster shares in some infrastructure companies, energy producers and real estate developers, analysts at Bank of America Merrill Lynch said in a Thursday report. State development bank BNDES trimmed the so-called TJLP rate to 5 percent on Wednesday, in a move to help spur investments and demand for corporate credit.

Infrastructure companies with the largest exposure to the debt linked to the TJLP rate are ALL America Lstina LogĂ­stica SA and OHL Brasil SA, analysts led by David Beker said. Infrastructure investments levered at the TJLP rate "would generate a higher return to equity." Other companies that could benefit include mall developer Iguatemi Empresa de Shopping Centers SA and energy producer MPX Energia SA, the analysts added.

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