Paraguay has inked a $66m long term loan with the IDB in a second 5-year phase of the country’s national rural roads program, which will upgrade a substantial part of the priority rural roads network. The IDB says that 80% of funds for the loan will come from the IDB’s ordinary capital, with a 30-year term, 5.5-years grace, and an interest rate based on Libor. The remainder comes from the bank’s fund for special operations and has a 40-year maturity, a 40-year grace period and pays 0.25%. The total cost of the project is $170m. Local counterpart funds total $25.4m, along with $79.0m in cofinancing, says the IDB. The resources will support improvements and maintenance activities on local roads along 6,000km in rural zones in the eastern part of the country, used mainly to transport agricultural products. Other components include engineering and supervision, institutional strengthening and program management, and monitoring and baseline work. The program will be carried out by Paraguay’s ministry of public works and communications.
Category: Bonds
US Fund Piles Into Usiminas
New York-based AllianceBernstein has acquired 5.06% of Usiminas’ preferred shares, according to a filing with the CVM. The 13.7m shares were acquired through open market purchases, according to the statement. At Wednesday’s close, AllianceBernstein’s share in Usiminas is worth BRL464m.
EPM Hits Road Trailing Oil Cousin
Colombia’s Empresas Publicas Medellin has opted to follow compatriot Ecopetrol into the DCM market and fit in a jumbo offering before the summer hiatus. The utility was set to begin investor meetings in New York today, visiting the US west coast by the end of the week, London Monday, and finishing in Boston on Tuesday. A 10-year $500m plus offer is expected. Proceeds are expected to fund future acquisitions, as the BB+ rated utility looks to expand in Colombia and throughout the Latin America. JPMorgan and Bank of America-Merrill Lynch are managing the sale.
Ecopetrol Rumored Picking Bond Duo
Colombia’s Ecopetrol, preparing a dollar bond to likely come in the second half of this year, is rumored to have selected JPMorgan and Barclays as managers on the deal, according to Colombia-based DCM sources. Officials at the state-owned oil producer and its presumed leads decline to comment. Ecopetrol, which has no financial debt, has been looking to boost the efficiency of its balance sheet through dollar bonds, peso notes and loans. Shareholders have approved a $4.1bn shelf for combined bond issuance in international and local markets. A $500m plus 10-year USD deal and local transaction of up to COP3trn in size, with multiple tenors, are expected. In May Ecopetrol raised COP2.2trn ($994m) via a 7-year loan from a group of local banks, priced at 400bp over DTF.
Peru Agro Gets IDB Backing
The IDB has approved a $20m loan for Peru to help it improve the competitiveness of its agricultural sector. The loan is for 20 years, has a grace period of 5 years and pays an interest rate over Libor, says the bank. The program is the first of three loans to support Peru in implementing a new agricultural policy framework introduced in June 2008.
CAF Extends Highway Cash to Argentina, Ecuador
The CAF has signed a $100m loan for Argentina to help finance the country’s railroad development program that aims to improve 29 km of railroads that connect the country with neighboring Paraguay. CAF says the total cost of the program is $166m and that the local government will chip in with the remainder of the funds needed. It is also disbursing $110m to Ecuador to help that country finance the construction of the Gualo-Puembo highway in Quito. The Andean bank says the highway will connect the capital city to a new airport that is being developed. The total cost of building the 13.5 km highway is $127.4m. The city will provide $17.4m to cover the total cost. Terms for the loans were not disclosed.
IDB Boosts Lending by $6bn
The IDB says it will make an extra $6bn available to borrowers, amid progress with technical studies for a capital increase. Canada has agreed to temporarily increase its share of the callable capital of the bank by $4bn for a period of 5-8 years. This comes on top of $2bn in additional resources made available by June changes to rules limiting the IDB’s lending capacity. The IDB eliminated its policy-based lending authority, a rule that limits total loan outstanding and guarantee exposure to the callable capital of non-borrowing members plus the paid-in capital and general reserves of the bank. “The decision to end the policy-based rule will bring the IDB, the biggest source of long-term lending for Latin America and the Caribbean, in line with other multilateral institutions, whose lending is limited by their net borrowings and the lending limits set in their charters,” says the IDB. Meanwhile, the bank says it has set a deadline of December to finish technical discussions on a capital increase, its first since 1994. The board of governors, made up of top financial officials from the IDB’s 48 member states, will meet again in Madrid October 8 to continue work on the issue. “The IDB will have to scale back operations in the future, unless more capital is made available. The IDB’s backlog of projects in the pipeline has held steady at $25bn, despite record levels of approvals and disbursements in recent years,” says the bank. Between 1994 and 2008 the IDB provided about $109bn of loans to the region.
Colombia Sees IDB Boost
The IDB has approved a $250m loan for Colombia to help boost the country’s water and sanitation services. The loan is for a 20 year term with a 5-year grace period, and priced over Libor. The improvement of the water and sanitation systems is expected to bring an increase in urban water coverage in 2011 to 97.8% from 94.5%, and sanitation coverage to 93.2% from 90.1%, says the IDB.
IDB Inks Bank of China Pact
The IDB has signed a partnership with the Bank of China to co-finance public and private sector projects in LatAm and the Caribbean. Under the agreement, Bank of China and the IDB will identify and invest in projects with or without sovereign guarantee in the infrastructure sector, trade finance and other potential areas as agreed by both institutions. Bank of China was the first Chinese bank to join the IDB’s trade finance facilitation program. China became the 48th member country of the IDB in January. In 2008, bilateral trade between LatAm and the Caribbean and China hit a record $143.3bn, up 40% from a year earlier, says the IDB.
Argentina Bags $850m IDB Loan
The IDB has approved an $850m loan for Argentina to be used to improve access to healthcare and education. The IDB loan is the first phase of a multiphase lending project to be implemented in about 5 years. It was has an amortization period of 25 years, an 18-month grace period, and a Libor-based interest rate.