Data compiled by Bloomberg noted gains of Corpbanca's bonds were bigger than any other emerging market high-grade bonds. The bank run by Chilean billionaire Alvaro Saieh has USD800 million of bonds due 2018, and had since returned 1.9% since Corpbanca announced on November 29 that it was engaged with potential bidders for a possible sale of the bank.
Sao Paulo-based Itau Unibanco Holding SA and Bilbao, Spain-based Banco Bilbao Vizcaya Argentaria SA has approached Saieh. The billionaire is looking for extra cash to inject capital to his retailer SMU SA after the latter restated earnings and violated debt agreements. Two sources who were familiar with the matter said on November 28 that Saieh had already tapped Goldman Sachs Group Inc. and Bank of America Corp to help manage the sale of a controlling stake in Corpbanca.
Aviva Investors Ltd emerging-market debt manager Aaron Grehan told the news agency over the phone from London, "Being taken in by a bigger, more diverse bank is positive. It's a credit-improvement story. The headlines last week caused a change in sentiment."
The extra yield that investors have demanded to own the benchmark notes of Corpbanca instead of US Treasuries dropped to 3.13 percentage points yesterday, which was a five-month low. On August 29, it reached 501 basis points, which was a record high. The Colombian peso gained 0.2% to ClP528.7 to the US dollar in New York at 7:35AM today.
An external press official of Corpbanca who refused to be named said the company will not be commenting on the merger talks.
One of the sources said Latin America's biggest lender in terms of market capitalization, Itau, is one of the banks the Chilean bank had approached. An unnamed official said Itau will not comment on the matter as per company policy.
The Santiago-based bank currently has a market value of USD4.22 billion. According to its latest annual report, Saieh and his family directly and indirectly has a 76% holding in the bank.
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