Companies begin to replace 'sanitizer' loans
Following a rush to get credit because of the pandemic scare and the uncertainties ahead, large Brazilian companies have already begun reviewing their short-term debts, make early repayments and raise long-term funds. In the daily operation of its wholesale and investment-banking units, Santander saw things change fast in the corporate world - both to enter and to get out of the crisis. Now, companies have taken advantage of the opening of the capital market to issue shares or bonds, rebalancing their financial structures.
In late March, the bank, which was used to lend some hundreds of millions of reais on a high-volume day at its corporate department, started to make contracts worth billions. "We had four weeks of a demand disproportionally higher than the average, both in calls and in origination of credit. We lent dozens of billions of reais," says Mario Roberto Leão, head of wholesale banking at Santander. "Even subsidiaries of multinationals, which never took local credit, sought financing, since the parent was not in conditions of sending money."
Large and medium-sized companies rushed to withdraw from their pre-approved limits, often to ensure the financial flow of their supply chains. The bank's strategy was to try and irrigate the higher number of companies on the counter or those that would be able to extend to suppliers. In the first half, Santander's credit outstanding increased 20.5% from a year earlier - among large companies alone, the leap was 41.8%.
Companies such as Vale, Petrobras and Votorantim rushed to lenders to withdraw from their pre-approved limits right at the beginning of the pandemic - a month ago, the state-owned oil giant tapped the capital market through a bond issuance. Companies such as the drugstore chain Pague Menos, which filed for an IPO with the Securities and Exchange Commission of Brazil (CVM), highlight that part of the proceeds from the primary offering goes to debt reduction. In the IPO of supermarket group Mateus, where Santander is also a coordinator, the allocation of the proceeds was not made explicit yet in the prospectus and the indebtedness even decreased - but it is reported that Santander was one of the banks that provided working capital for the company during the pandemic. The bank does not comment on ongoing offerings.
Sports retailer Centauro, for example, held a stock offering to pay off debt, one of the first share sales of the market reopening in the pandemic - Santander was one...
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