Tag Archives: Credit Market

Shares in Italian highway group ASTM surged in a bid to make the company private | Instant News


MILAN, Feb 22 (Reuters) – ASTM shares surged 27% on Monday, lifted by a buyout offer from a top Italian motorway group investor who wants to take the company private and revamp it.

Nuova Argo Finanziaria (NAF), which holds a 42% stake in ASTM, said at the weekend it would offer 25.60 euros per share in a new vehicle to buy minority investors at an outlay of up to 1.7 billion euros ($ 2 billion).

This represents a premium of 28.8% over ASTM’s official closing price on Friday.

The NAF said it plans to transform business, adding it will be easier to pursue reorganization of unlisted companies.

The Italian Gavio family are major investors in the NAF along with the infrastructure arm of French private equity firm Ardian.

Ardian agreed to invest in ASTM just days before a highway bridge operated by toll road company Atlantia collapsed in August 2018, killing 43 people.

In response to the tragedy, the Italian government has stepped up investment oversight by concessionaires, establishing a new body to monitor safety standards.

$ 1 = 0.8269 euros Report by Elisa Anzolin, written by Valentina Za; Edited by Kirsten Donovan

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S&P upgraded New Zealand’s rating; said recovery is faster than most developed countries | Instant News


Feb 22 (Reuters) – S&P Global Ratings on Monday raised New Zealand’s foreign and local currency credit ratings by one notch to ‘AA + / A-1 +’ and ‘AAA / A-1 +’, saying the country was recovering. self. faster than most developed countries from the impact of COVID-19.

“We now believe that the government credit metric can withstand the potential damage from a negative shock to the economy”, the rating agency noted bit.ly/2MeHVAw, adding that the country was able to contain the spread of COVID-19 better than most other countries.

Reporting by Kanishka Singh in Bengaluru; Edited by Kim Coghill

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FOCUS-Brazil’s overwhelmed healthcare system yields profits for dealmakers | Instant News


SAO PAULO, February 16 (Reuters) – Brazil’s public health system has been pushed to the breaking point by one of the world’s deadliest coronavirus outbreaks, but the private health care sector is experiencing an unlikely explosion of deal-making.

The drive for consolidation, which comes amid growing demand even beyond the pandemic thanks to an aging population, has spawned the country’s biggest takeover deal so far this year, its top IPO in recent years and has lured investors ranging from US private equity firm Carlyle Group Inc to a venture capital fund and one of Brazil’s most prominent real estate developers, founder Cyrela Elie Horn.

“Brazil’s population is aging fast. This means that there will be a higher demand for healthcare, ”said Morgan Stanley Executive Director Cezar de Faria. “Given Brazil’s budget constraints, it is highly unlikely that the government will be able to provide all the necessary services.”

By 2060, people over 65 will make up 25.5% of the country’s population, up from around 10% now.

Investors and bankers also cited factors including the demand for alternatives to the country’s overwhelmed public health system and sufficient room to increase efficiency in privately owned hospitals.

Hospital operator Rede D’Or conducted Brazil’s biggest IPO in seven years last December and health insurers Hapvida SA and Notre Dame Intermedica SA have proposed the biggest merger so far this year in the country, worth an estimated $ 9 billion.

Brazilian private equity firm IG4 was so tempted by a potential turnaround for the country’s underperforming private hospitals that they created a company aiming to buy and revive the hospital.

After a string of deals, OPY Health IG4 is now seeking a private placement of around $ 100 million to buy six more hospitals, a source with knowledge of the funds told Reuters.

Alongside these two big deals, OPY’s buyout demonstrates how the deal-making boom is transforming the country’s fragmented private healthcare system.

A spate of recent deals has bankers actively looking for the next opportunity in the $ 197 billion private healthcare sector.

While the pandemic does not play a direct role in the deal’s gains, it could indirectly drive private investment growth as public clinics in cities like Manaus are being pushed to their limits by the coronavirus crisis.

OPY Health has one of the largest hospitals serving Brazil’s public health system in Manaus, and had a lower COVID-19 death rate than state-run hospitals during the recent city crisis with oxygen shortages.

As of Monday, Brazil had 239,245 coronavirus-related deaths, trailing only in the United States, and the country has more than 9.8 million infections. (Graphic: tmsnrt.rs/34pvUyi) (Interactive graphic tracking of the global spread of the coronavirus: open tmsnrt.rs/2FThSv7 in an external browser.)

At the same time, Brazilian government regulations limit prices only for medicines and health insurance that are sold directly to individuals, but not for group employers’ plans, which contribute to high margins.

VITAL SIGN

Rede D’Or, whose December IPO may be the first sign of a hunger for such assets, is now trading 68 times its income before interest, taxes, depreciation and amortization (EBITDA), much higher than its larger US counterpart HCA Healthcare Inc, which trades at 9 times EBITDA.

Hapvida and Intermedica are also trading at nearly 30 times EBITDA.

However, the expensive valuations have not scared off most investors. Carlyle and GIC Singapore sold a small portion of their Rede D’Or stake in the IPO.

“The boom in Brazilian health care is just beginning,” said Hans Lin, co-head of Bank of America’s investment bank in Brazil. Stock offerings and fundraising will trigger more M&A, he added.

In a sign of the sector’s relative fragmentation, the country’s top five health insurers have a combined market share of 33%, compared to 68% in the United States, Morgan Stanley said.

As agreement among public hospitals has also accelerated, analysts also see the potential for consolidation in specialized care areas such as clinical oncology or ophthalmology.

Elsewhere, several start-ups are basing their business models on the need to control the country’s soaring medical inflation, which hit 11.5% last year, more than twice the overall average, said consulting firm Mercer Marsh.

Diagnostic services startup Labi, stepping up its series B round, found a niche offering blood tests for 10% of the cost of more well-known companies like Fleury SA.

GOOD PROGNOSIS

At least eight Brazilian health care companies are planning an IPO this year, such as the network of hospitals Care, Mater Dei and Kora Saude, which was inspired by Rede D’Or.

IPO activities also include pharmaceutical companies such as Teuto, seeking at least 1 billion reais ($ 186.23 million) worth of flotation, and Viveo, a health product manufacturer planning to raise about $ 300 million.

Fundraising activity by healthcare technology companies is also growing, executives said.

Apart from Labi, telemedicine provider Conexa, which is backed by private equity firm General Atlantic, is preparing a new funding round of up to 100 million reais to acquire more companies. During the pandemic, Conexa’s online doctor visit requests increased from 50 to 15,000 visits a day.

“The Brazilian drug council is expanding telemedicine services that were previously banned, so the COVID crisis is giving our business a big boost,” said Guilherme Weigert, CEO at Conexa. ($ 1 = 5,3706 reais)

Reporting by Carolina Mandl and Tatiana Bautzer in Sao Paulo Editing by Christian Plumb and Matthew Lewis

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Australia’s resurgent housing boom lifted banks from sluggish | Instant News


SYDNEY, February 11 (Reuters) – Australia’s housing market pulled A $ 2 trillion ($ 1.6 trillion) economy out of its first recession in three decades with record high prices, soaring home loans and building approvals at their 19-year peak.

Among the main beneficiaries of the boom are Australia’s largest banks, which have seen a stock rally on expectations of returns and dividends in 2021.

Australian banks fell out of favor last year when the COVID-19 pandemic forced entire sectors of the economy to shut down, prompting the central bank to cut interest rates three times to a record low of 0.1% and launch an unprecedented bond-buying program.

The property market’s solid recovery since then, lower-than-expected loan deferrals and strong credit growth have sent consensus earnings expectations for banks up by 31% over the past two months, said Shane Oliver, Sydney-based head of investment at AMP. .

The extremely low interest rate environment is generally negative for bank earnings, and a flat yield curve, where the gap between short-term and long-term returns is narrow, should squeeze profits.

However, in the case of Australia, looser financing conditions and strong government stimulus have pushed lending volumes higher, more than offsetting the hit from tighter net interest margins.

Property deals surged as residents took advantage of lower borrowing costs and because remote working technology allowed people to buy larger residences from downtown.

Major lender Commonwealth Bank of Australia on Wednesday increased its dividend payout ratio to 67% after posting above-expected first-half cash profit.

The Sydney-based bank also reported a surge in household and business savings amid solid loan growth while loan holdings slipped to 25,000 on January 31 from 145,000 loans at the end of June.

“Short-term macro pulls appear to be in favor of the bank,” said Anthony Doyle, a cross-asset investment specialist at Fidelity International.

“Rising house prices, the reopening of the economy and the absence of provisions point to a sharp rise in income and dividend growth in 2021,” added Doyle.

Shares of the so-called “Big Four” banks – CBA, Westpac Banking Corp, ANZ Banking Group and National Australia Bank – have jumped between 5% and 15% since the start of the year.

In comparison, global peers such as Lloyds Banking, Citi, ING and HSBC fell or were only slightly higher.

Australia’s REA Group, which advertises property and property-related services on websites and mobile apps, is also reaping the benefits of the housing revival.

“We expect listings to grow 10% in 2021 driven by higher confidence among vendors due to strong buyer interest, low interest rates and healthy bank liquidity,” said Jefferies analyst Roger Samuel, boosting REA for “buying”.

THE FUTURE IS CHALLENGED

The housing boom, sparked by massive monetary and fiscal stimulus, is good for an economy growing at a faster-than-expected rate after the country managed to contain last year’s coronavirus outbreak.

Monetary easing and fiscal stimulus approaching A $ 300 billion have helped revive the housing market, with economists forecasting the value to rise 7-10% by 2021.

With interest rates expected to remain at 0.1% for some time and a third round of quantitative easing likely later this year, the bank’s earnings outlook remains challenging.

Although the central bank upgraded Australia’s economic outlook last week, it does not expect the unemployment rate to reach its full employment forecast and inflation is not seen hitting its target range of 2-3% through 2023.

Prime Minister Scott Morrison has signaled international borders will remain closed this year even as a vaccine has been rolled out globally, meaning population growth from migration will remain near zero.

In addition, the government has also gradually eased some of the fiscal stimulus launched after the pandemic, creating uncertainty over jobs and consumer spending.

Fidelity’s Doyle remains “underweight” on Australian banks and noted some structural obstacles.

“Underlying profits for banks will remain challenged in an environment of very low interest rates and quantitative easing,” he said. “Sufficient liquidity has resulted in intense competition within the sector, as banks seek to increase lending and gain market share.” ($ 1 = 1.2932 Australian dollars)

Reporting by Swati Pandey; Edited by Sam Holmes

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Brazilian bank lending in 2021 is expected to grow by 7.3%, the survey shows | Instant News


SAO PAULO, February 10 (Reuters) – Brazilian bank lending is expected to grow 7.3% in 2021 but loan quality is likely to deteriorate, a survey by the country’s banking lobby association Febraban showed on Wednesday.

The expected loan growth rate is slightly up from the December survey, when the bank forecasts Brazil’s loan book to increase by 7% in 2021.

The bank said the 90-day loan default ratio should be 3.7%, an increase from their December forecast of 4% but up from 2020 when it hit 2.9%.

Reporting by Carolina Mandl; Edited by Edmund Blair

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