Credit Suisse Said to Be in Talks for Part of BTG Loan Portfolio

  • Brazilian bank said to sell stake in Italy's Monte dei Paschi
  • BTG sells BR Properties holding, still has almost 19%

Credit Suisse Group AG is in talks to buy part of Grupo BTG Pactual SA’s 22 billion-real ($5.7 billion) credit portfolio, a person with direct knowledge of the matter said.

No agreement has been made and a deal might not be reached, the person said, asking not to be identified discussing private negotiations. Officials at BTG and Zurich-based Credit Suisse declined to comment on the talks.

BTG is shopping its loans to large corporations after the Nov. 25 arrest of its founder, Andre Esteves, forced the Sao Paulo-based company into a life-or-death struggle to sell assets and raise cash. BTG’s total loan portfolio was 43 billion reais at the end of the third quarter, though half are guarantees that can’t be sold, another person said.

About 7.5 billion reais of the total is pledged as collateral for an emergency credit line of 6 billion reais from the nation’s privately backed deposit-guarantee fund, Fundo Garantidor de Creditos, according to FGC legal director Caetano de Vasconcellos. Banco Bradesco SA bought a credit portfolio of about 1.2 billion reais from BTG earlier this month.

While the FGC line of credit is helping BTG avert a liquidity crisis for now, asset sales are vital if it’s to survive 2016, according to a Dec. 7 analysis by Goldman Sachs Group Inc.

BTG’s $1 billion of 4 percent bonds due January 2020 rose 3.3 cents Tuesday to 67 cents on the dollar to yield 15.1 percent as of 3:48 p.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The bonds traded as low as 52.5 cents on Dec. 3.

The lender has also sold a stake it held in Siena, Italy-based Banca Monte dei Paschi di Siena SpA, according to a person familiar with the sale. BTG said that holding was 1.92 percent as of Nov. 5, which would fetch about 69 million euros ($75 million) as of Tuesday.

BR Properties

BTG also raised 463 million reais on Dec. 10 by selling a stake in BR Properties SA, a company that acquires, develops and manages real estate in Brazil, the investment bank said Monday in a regulatory filing. It now holds almost 19 percent of BR Properties, less than the roughly 36 percent it held as of Dec. 8, according to a regulatory filing and data on the company’s website. The bank said it may sell the remaining stake.

GP Investments Ltd. announced on Friday an offer to buy as much as 63 percent of BR Properties for 10 reais per share. That was a 21 percent premium over Thursday’s closing price, though still 9 percent below the level on Nov. 24, the day before Esteves’s arrest.

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