The CAF says it plans to approve $900m in loans and make disbursements worth $500m this year to Ecuador. The plans were announced during a recent visit CAF executive director Enrique Garcia made to Ecuador. The aid would go to financing public and private sector projects.
Category: Bonds
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Brazilian Utility Cinches Local Bonds
Brazilian regulators have approved a BRL300m debenture issue for Light, according to the CVM. The Rio de Janeiro utility’s 2011 bonds pay 115% of the DI interbank rate. Banco Votorantim is managing the sale, rated Aa2/A+ on a national scale. Light, controlled by a consortium led by Cemig, plans to use proceeds to fund working capital and refinance about BRL100m in debt.
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JPMorgan Makes DCM Leap
A string of bond deals – and more to come – pushes JPMorgan close to the top of the regional DCM league table for the first time in years. The US shop is on a roll year to date, with $3.71bn in proceeds from 10 deals, or 10.47% market share, Dealogic data shows. HSBC is still first, with $3.77bn from 20 transactions (10.63%), but JPMorgan has made the jump from third place on June 26 – when it had little over $2bn – and looks set to topple the UK bank. It is fresh from joint leading a blowout $1.5bn trade for Ecopetrol, as well as a Peru tap, and has another $600m or so in proceeds on the way from Arauco and EPM. “JPMorgan is benefitting from good write-ups in the international press,” says a New York DCM banker at a competing shop. “They are benefitting from being in a strong position when other banks are weak,” he adds. The banker also notes that JPMorgan is not using balance sheet to the same extent as HSBC. A year ago, JPMorgan was lagging at number 9 for 2008 through July 20, with just $1.42bn, or 3.58% share. It has not been in the top bracket for debt since 2006, and after a late 2008 cull of DCM talent, some competitors wondered whether JPMorgan was finished in LatAm bonds. LatAm DCM volume has shrunk 10.7% year-on-year, to $35.4bn so far and the top 10 includes most of the same names. Glaring omissions from the top 10 include Deutsche, which was number 1 this time last year, with close to $4bn in proceeds, and Itau, which was number 8. Other DCM houses in decline are Barclays, at number 6 versus 2 last year, and Credit Suisse, which has tumbled to 9 from 3. New entrants in the top 10 versus a year ago are Goldman Sachs ($1.50bn, 4.23%) and BofA-Merrill ($1.44bn, 4.06%). Dealogic’s DCM data include local currency transactions.
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Paraguay Gets IDB Roads Funds
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.
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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.
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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.
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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.
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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.
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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.
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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.