Latin Day Ahead: Santander Brazil Raising $8 Billion in IPO

Banco Santander SA’s Brazilian unit is raising about 14.1 billion reais ($8 billion) in an initial public offering; Peru’s central bank will probably keep its benchmark lending rate at a record low; Vale SA (VALE3) was upgraded to “buy” from “neutral” at Goldman Sachs Group Inc.; Gerdau SA was upgraded to “buy” from “hold” at Deutsche Bank AG.

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Santander Brazil Unit Raising $8 Billion in IPO to Fund Growth

Banco Santander SA’s Brazilian unit is raising about 14.1 billion reais ($8 billion) in an initial public offering, a record in the country, to fund expansion as growth accelerates in Latin America’s largest economy.

Peru’s Central Bank Will Probably Keep Rate at Record Low 1.25%

Peru’s central bank will probably keep its benchmark lending rate at a record low as policy makers evaluate signs that an economic recovery has taken hold.

Vale Raised to ‘Buy’ at Goldman Sachs on Higher Iron-Ore Demand

Vale SA, the world’s biggest iron-ore miner, was upgraded to “buy” from “neutral” and had its price estimate raised to $31 from $25 at Goldman Sachs Group Inc. on the outlook for iron-ore prices.

Gerdau Upgraded to ‘Buy’ at Deutsche Bank on ‘Bullish’ Outlook

Gerdau SA, Latin America’s biggest steelmaker, was upgraded to “buy” from “hold” at Deutsche Bank AG, which increased its price estimate to $20 from $11. Usinas Siderurgicas de Minas Gerais SA, Brazil’s second-largest steelmaker, had its price projection raised to $39 from $27 at the bank.

MAIN COMPANIES:

Brazil

Petroleo Brasileiro SA (PETR4) (PETR4 BS): Brazil’s so-called pre- salt offshore fields will be “viable” with oil prices of at least $40 to $45 per barrel, Petrobras Chief Executive Officer Jose Sergio Gabrielli told lawmakers in Brasilia yesterday. Petrobras rose 0.1 percent to 34.49 reais.

Vale SA (VALE5 BS) and MMX Mineracao & Metalicos SA (MMXM3 BS): Brazil’s government is reviewing taxes and royalties charged to the mining industry and will send to Congress a new regulatory framework later this year, Mining and Energy Minister Edison Lobao said yesterday. Vale, the world’s biggest iron-ore producer, rose 0.2 percent to 37.21 reais. MMX, the iron-ore miner controlled by Brazilian billionaire Eike Batista, rose 4 percent to 12.17 reais.

Chile

Soc. de Inversiones Oro Blanco SA (OROB CC): The Santiago- based investment company’s board agreed to offer 5.27 billion shares in an auction on the Santiago exchange. Bidding for the shares, which were left over from a sale approved last year, will start at 7.9 pesos each, Oro Blanco wrote in a regulatory filing. The shares slid 1.7 percent to 8.25 pesos.

Mexico

Grupo Aeroportuario del Pacifico SAB (GAPB MM): September traffic for Mexico’s largest non-government airport operator declined 9.9 percent from a year ago. GAP rose 1.6 percent to 37.89 pesos.

Peru

Refineria la Pampilla SA (RELAPAC1 PE): Peruvian crude oil and liquid gas production rose 2.8 percent last month on gains at the Camisea gas field, the country’s largest, the government said. The company rose 2.8 percent to 2.58 soles.

LATIN AMERICAN MARKETS:

Chile: The trade surplus widened to $980 million in September from the year-earlier period, compared to $884 million in August, according to the median forecast of 10 economists in a Bloomberg News survey. The central bank is slated to release its trade report at 8:30 a.m. New York time.

The peso gained 0.6 percent to 553.85 per dollar.

The yield for a basket of Chile’s 10-year peso bonds in inflation-linked currency units, called unidades de fomento, fell one basis point, or 0.01 percentage point, to 2.74 percent, according to Bloomberg composite prices.

Peru: The central bank will leave the overnight lending rate unchanged at 1.25 percent, according to 13 of 14 economists surveyed by Bloomberg. One analyst expects Banco Central de Reserva del Peru to cut the key rate a quarter-percentage point to 1 percent.

The sol was little changed at 2.8660 per dollar.

The yield on Peru’s 8.6 percent bond maturing August 2017 rose one basis point to 4.94 percent, according to Citigroup Inc.’s unit in Lima.

Other prices in Latin American markets:

Argentina: The peso was little changed at 3.8386 per dollar.

The yield on the country’s inflation-linked peso bonds due in December 2033 rose 44 basis points to 11.60 percent, according to Citigroup Inc.’s local unit.

Brazil: The real gained 0.5 percent to 1.7510 per dollar.

The yield on the zero-coupon, real-denominated bond due in January 2010 rose four basis points to 8.73 percent, according to Bloomberg prices.

Colombia: The peso climbed 0.9 percent to 1,907.85 per dollar.

The yield on Colombia’s benchmark 11 percent bonds due July 2020 fell five basis points to 8.83 percent, according to Colombia’s stock exchange.

Mexico: The peso gained 1.1 percent to 13.4687 per dollar.

The yield on Mexico’s 10 percent bond due December 2024 was little changed at 8.07 percent, according to Banco Santander SA.

ECONOMIES: Chile will release its September trade balance; Brazil will publish September vehicle sales and CNI capacity utilization; Peru will announce its reference rate.

To contact the reporter on this story: Laura Price in London at lprice3@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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