Votorantim Cimentos preps euro trade

Brazil's leading cement producer, Votorantim Cimentos, announced a new seven-year benchmark euro trade to be priced as early as this week.

The deal is expected to be leverage-neutral as proceeds will be used to refinance existing debt, Moody's said. As positives, the rating agency cites the company's strong credit metrics and importance to parent Votorantim Industrial, to which it contributed about 49% of total EBITDA generation last year.

On the downside, corruption investigations have impacted the company, one among many cement companies fined for price-fixing, according to Moody's. The company, which denied the allegations and is appealing the imposed sanctions, is expected to sell assets as a result, the agency said.

This comes amid speculation that the Brazilian sovereign may also tap the international markets to assist corporates in their capital raising efforts, though some bankers believe spreads are not yet tight enough.

Votorantim Cimentos has mandated Citigroup, Deutsche Bank, HSBC, Banco Votorantim, BB Securities, Bank of America Merrill Lynch, MUFG and Santander GBM to arrange a series of investor meetings ahead of a potential euro-denominated bond issue.