PRESS DIGEST - Wall Street Journal - May 30
May 30 The following are the top stories in the Wall Street Journal. Reuters has not verified these stories and does not vouch for their accuracy.
* Itaú is first local bank to top ranks * Bankers expect a surge in high-grade bond deals * Imputed fees rose 37 pct in 2012; deals surge By Guillermo Parra-Bernal SAO PAULO, Jan 4 Brazilian investment banks overtook foreign rivals in managing global debt offerings by the nation's government and companies last year, capturing the lion's share of a 67 percent surge in fees, Thomson Reuters data showed on Friday. A 37 percent increase in Brazil global debt offerings was mostly the by-product of record-low interest rates worldwide that allowed for a balance between higher returns and fundraising alternatives, bankers said. They expect volumes to keep growing this year, especially in segments where risk and returns are higher, such as so-called junk debt. According to Thomson Reuters' annual deal-making report, the federal and sub-national governments and companies sold a total $50.93 billion of debt last year, up from $37.29 billion in 2011. The largest 10 bond underwriters handled eight in every 10 issues last year, slightly more than in 2011, the report showed. In 2012, Itaú Unibanco Holding SA overtook HSBC Holdings Plc and Banco Santander SA to become the No. 1 manager of global debt sales by Brazil's government and companies - the highest ranking for a local firm since Thomson Reuters began tracking the data in 2010. Itaú, which oversaw about $6.02 billion worth of bond sales in 2012, ranked third the prior year. "Issuers in Brazil were offering to pay attractive interest rates and I don't see why this would change," Jean-Marc Etlin, managing director for investment banking at Itaú BBA, Itaú's wholesale banking unit. "As investors seek attractive risk and returns, more issuers may be able to sell debt overseas under favorable conditions." Etlin expects 2013 to be an active year where "any reasonable products offered to the market should likely draw robust demand." Itaú's pipeline of potential deals this year, which Etlin said "looks better" than last year, will likely be bulked up by a handful of investment grade-type issuers such as infrastructure companies trying their luck in the bond market. Banco do Brasil SA's investment banking unit ranked second after underwriting $5.59 billion worth of bond deals last year. The 2011 league table leader, Santander, ranked third in 2012, with $5.15 billion, and HSBC's bond unit - headed by veteran banker Alexei Remizov - fell to fourth place from second, according to the Thomson Reuters report. Bond activity in Brazil outpaced global debt capital markets by a large margin. According to the Thomson Reuters report, bond sales across the globe rose 10 percent to $5.6 trillion last year. Furthermore, 2012 was the strongest year on record for sales of so-called high-yield bonds - debt rated below investment grade - as well as the least risky securities. "There is demand for yield and Brazilian companies offer good returns because they remain well capitalized and investors are willing to take a little more risk," Roberto Barbutti, co-head of investment banking at Bank of America Merrill Lynch, said in an interview. As a result, imputed fees for bond deals rose to an industry total of $249.6 million last year compared with $201.4 million a year earlier. Fees fell 26 percent in 2011, according to the report. WEAK IPO, M&A The jump in underwritten volumes came as the number of total debt deals soared to 103 from 72 in 2011, the report showed. Debt capital markets activity, known more commonly among bankers as DCM, was a bright spot in a grim year marked by the slowest activity in Brazilian equity markets since at least 2005 and an 11.9 percent tumble in the announced value of mergers and acquisitions. Brazilian companies, which for years relied on a dynamic local equity market for new cash, are only beginning to tap debt markets. Etlin estimates that, of the approximately 2,500 Itaú wholesale banking customers, only 70 to 80 are active sellers of debt locally and globally. Sectors that could be very active include infrastructure, where a handful of companies are undertaking huge projects ranging from hydro power dams to ports, said Roberto D'Avola, head of Latin America DCM for JPMorgan Chase & Co, which rose to the top of Thomson Reuters' global debt rankings last year. New York-based D'Avola also said commodity producers could tap debt markets more actively this year as prices and demand for some of their products improve. Demand for Brazilian debt will not be solely a function of economic growth, but also of company fundamentals, which look solid at the moment. "Liquidity will keep coming to Brazil systematically ... investors see value in Brazil's paper," he added. Economists do not expect a robust recovery in Latin America's largest economy. According to a weekly central bank survey released on Monday, gross domestic product should expand 3.3 percent this year, down from estimates a couple of months ago that it could grow as much as 4.5 percent. The following is a table with year-to-date rankings: ================================================================ FINANCIAL ADVISER VALUE RANK NUMBER OF 2012 2011 DEALS ================================================================ taú Unibanco $6.022 bln 1 3 31 Banco do Brasil $5.587 bln 2 8 24 Santander GB&M $5.125 bln 3 1 10 HSBC Holdings $4.555 bln 4 2 22 JPMorgan Chase $4.307 bln 5 7 15 Citigroup GB&M $3.843 bln 6 4 15 Bradesco BBI $3.215 bln 7 6 23 Deutsche Bank $2.817 bln 8 9 13 BTG Pactual $2.409 bln 9 10 13 Morgan Stanley & Co $2.263 bln 10 14 9 ================================================================ TOP 10 ADVISORS $40.146 bln INDUSTRY TOTAL $50.933 bln 103 ================================================================
CARACAS, May 29 The president of Venezuela's opposition-run Congress on Monday accused Wall Street investment bank Goldman Sachs of "aiding and abetting the country's dictatorial regime" following a report that it had bought $2.8 billion in bonds from the cash-strapped country.