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Moody's: Cade's approval of Cetip-BM&FBOVESPA merger a credit positive

Brazilian antitrust regulator Cade's approval of the merger of Cetip SA – Mercados Organizados and BM&FBOVESPA SA is credit positive for BM&FBOVESPA, Moody's said March 27.

The approval clears the final regulatory hurdle for the completion of the deal, allowing BM&FBOVESPA to consolidate its leading position in Brazil's financial markets infrastructure sphere, Moody's said in a statement. The bourse expects to release roughly 100 million Brazilian reais in recurring expense synergies from the merger over a three-year period.

In approving the merger, Cade imposed conditions which include allowing new entrants in the industry to access BM&BOVESPA's cash equities clearinghouse and central securities depository services, among others. Due to these conditions, Moody's expects competition in cash equities trading to increase.

As of March 24, US$1 was equivalent to 3.13 Brazilian reais.