The IDB has approved a $100m credit line for Argentina, to help it finance its technological innovation program. This is the first of 3 operations totaling $750m, the multilateral says. The other 2 operations would come into effect in 2011 and 2013. The first credit line was approved for a 25-year period, with a 5-year grace period, and a Libor-based interest rate.
Category: Bonds
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JPMorgan Tops Fees League
A flurry of summer DCM and ECM underwriting has rocketed JPMorgan to the top of the investment bank fee charts for the year to date, Dealogic data shows. The US shop has bagged $100.5m in revenue in the year to August 31, or 15.2% of a battered regional fee pool, which includes commissions from M&A, ECM, DCM and loans. JPMorgan was fifth in mid-June, when it had booked $28m in fees. In second place is Bradesco ($66.7m, 10.1%), which jumped 8 places due to senior participation in VisaNet’s $4.26bn June IPO, according to Dealogic. Third is fellow VisaNet equity global coordinator Santander, with $59.2m, or 8.9% of the market. The top 3 is completely different to this time last year, when Credit Suisse led with $233.6m (20.2% share), Citi was second ($117.5m, 10.2%) and Itau third ($110.8m, 9.6%). The LatAm fee pool has shrunk 43% to $662m in the year to mid-August, from $1.16bn in the corresponding period of 2008, Dealogic data shows. However, bankers are hoping that a post-Labor Day Brazil-led revival will drag regional investment banking revenue back up. Year-to-date, Brazil has accounted for 75% of M&A and 97% of ECM revenue, according to Dealogic. Colombia leads a more diversified DCM fee market, with 27% of the fees from entities based there, while Brazil yielded 24% of the total bonds, down from 30% in 2008. By market, Credit Suisse has bagged most M&A fees, at $29.0m, or 17.7% share, while JPMorgan leads DCM revenue, with $30.4m, or 17.9%. By volume so far this year, JPMorgan tops DCM and ECM rankings, while UBS heads M&A and Santander is well ahead for loans. (For full rankings, see www.latinfinance.com/LeagueTables2.aspx#Fees)
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DomRep Gets IDB Loan
The IDB has approved a $70m loan for the Dominican Republic so it can enhance its conditional cash transfer program. This loan represents the first of a $300 million multiphase program and has a 25-year term, with an 18-month grace period, and a Libor-based interest rate.
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Cabei Plots Costar Bond Return
Central American development bank Cabei is planning a 5-year bond issuance in the Costa Rican domestic market, treasurer Felix Magana tells LatinFinance. The issue should be for CRC35bn ($70m) and take place in the first week of September. Citi is managing the sale, which follows February and June placements in that market that totaled CRC26bn. Magana also says the bank will look to place again in Taiwan and Colombia, markets where Cabei has already issued this year, as it continues to diversify funding sources. The multilateral is also considering USD issuance, its first in that market since 2005.
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S&P Upbeat on CAF Capital Increase
S&P has revised CAF’s outlook to stable from negative after the lender’s shareholders approved a $2.5bn capital increase for 2010-2017. S&P also affirms CAF’s A+ rating. “Despite economic pressures in Latin America and higher risk embedded in CAF’s credit portfolio, this approved capital increase underscores CAF’s high franchise value as a countercyclical lender to the region,” says credit analyst Lisa Schineller. The capital increase is in addition to $1.5bn in already-scheduled paid-in capital contributions by Argentina, Brazil, Panama, Paraguay, and Uruguay, slated to be completed by 2014.
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Gol to Issue After 300% Takeoff
Brazilian airline Gol plans to raise BRL550-BRL650m in new equity capital following a tripling of its stock price over a 5-month period. The company has filed with the CVM to issue primary and secondary stock in the form of preferred, ordinary and ADS. The deal falls in line behind September hopefuls like Santander, whose offering could reach BRL4bn-BRL6bn, and Tivit, which is expected to bring the year’s smallest offering to date, at around BRL600m. Gol will compete in size with Tivit, which raises the question of how well it will be received by a fussy investor base focused on liquidity. “This will help increase the company’s liquidity,” says an analyst who declines to be named. He notes average daily turnover for Gol’s stock, which this year stands around 1.0%-2.5% of market cap, is lower than many Bovespa-listed names. A banker on the deal concurs, noting that capital structure should also benefit. Gol says it intends to use proceeds to strengthen its balance sheet, particularly its cash and cash equivalents position. Gol shares sank 7.71% Tuesday on the news as investors took profit. In August alone, Gol shares have soared 40%, beating the Bovespa’s 3.2% rise. Controlling shareholders, which make up the Asas Investment Fund, will be subscribing to the new offer to maintain the ordinary to preferred ratio of 1:1, and use all proceeds from their sale of preferred shares to purchase common units. BofA Merrill, Itau BBA, Morgan Stanley and Bradesco BBI will jointly lead the international deal, with BB Securities as placement agent outside the US. Gol claims to be the largest low-fare airline in LatAm.
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CAF Capital to Jump by $4bn
Multilateral CAF has approved a capital increase of $2.5bn. This, in addition to the $1.5bn that it expects to gain from the entry of Argentina, Brazil, Panama, Paraguay and Uruguay as full members, will bring the total capital increase to $4.0bn, the bank says. It adds that the $2.5bn capital increase, which will be paid for between 2010 and 2017, will allow CAF’s assets to triple to $12bn in 8 years and to sign more than $100bn in loans during the same period. So far this year, it has approved $5.5bn in loans.
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IDB Considers $1bn Credit for Mexico
The IDBs board will take proposals for a $1bn credit line for Mexico’s Nacional Financiera (Nafinsa) bank later this year, an IDB spokesman confirms, adding that negotiations for the credit line will likely take place with the finance ministry. Nafinsa, is a state-controlled entity, extends credit to small and medium-sized enterprises in Mexico.
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CAF Approves $2.2bn in Loans
Multilateral CAF has approved $2.2bn worth of financing to Argentina, Colombia, Ecuador, Peru, Uruguay and Venezuela. Peru is getting two loans totaling $600m. One, worth $300m, will finance the Lima Electric Train and the other half will be used to deal with emergencies caused by natural phenomena. Venezuela is also getting $600m to finance its Termozulia thermoelectric plant. Colombia’s Treasury Ministry will receive $400m so it may continue to decentralize operations. Meanwhile, a $275m loan goes to improve water and sewage systems in Argentina’s capital. And Ecuador will get $250m to optimize its electricity infrastructure. Lastly, Uruguay will receive $100m to develop its road infrastructure. Terms of the loans were not disclosed and CAF did not return calls.
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Deutsche Poaches Merrill DCM Banker
An August 14 Daily Brief “Deutsche Poaches Merrill DCM Banker” incorrectly describes the nature of the move. It should read “Deutsche Hires Merrill DCM Banker.”