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.
Category: Bonds
Posted inDaily Brief
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.
Posted inDaily Brief
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.
Posted inMagazine
Boutique Investment Banking: Who Are the New Players?
With the investment banking model under siege, entrepreneurs see an opportunity to fill a void in sellside service. An oversupply of available talent helps drive the process.
Posted inMagazine
Trade Finance: China Weighs
Multilaterals, ECAs and China are covering for traditional providers of trade finance, who are expected to deploy less this year. However, commercial banks are poised to jump back in.
Posted inMagazine
Ranking the Buyside: Beaten by the Index
Exceptional volatility caused by the global financial crisis has wiped out much of the last five years of hefty fund gains. Managers struggle to position for recovery.
Posted inDaily Brief
IDB Extends Credit to Honduras
The IDB has approved a $50m credit line for Honduras to revamp the road that connects capital city Tegucigalpa with Puerto Castilla, improving freight and passenger transportation conditions. The road is known as the agricultural corridor. The credit line consists of a $35m million tranche for a 30-year term, with a 5.5-year grace period, and carries a variable interest rate. The remaining $15m is for a 40-year term with a 40-year grace period and a 0.25% interest rate. The program is expected to cost $77m, of which the OPEC fund for International Development will provide $25m. The Honduran government’s $2m contribution will come from local counterpart funding.
Posted inDaily Brief
IDB Increases Grants to Haiti
The IDB plans to give Haiti $120m in grants in 2010, a $20m increase from what it will have given the country this year. Haiti received $50m from the IDB in 2008. The are designed to help Haiti invest in infrastructure, basic services and disaster prevention, says the IDB.
Posted inDaily Brief
NCR Builds ATM Facility
NCR, the business technology company, is building a new manufacturing and R&D center in Brazil to produce ATMs, as well as other LatAm and Caribbean markets. NCR will initially invest around BRL73m in the Brazil facility. Brazil is the third largest ATM market in the world, says NCR. The Brazil ATM market will grow 16% by 2012, it adds, citing Retail Banking Research. NCR’s ATM production in the region is currently outsourced to a contract manufacturer. ATM manufacturing and product development will be moved to NCR’s new facility and production is anticipated to begin by December 2009. NCR is based in Georgia.
Posted inDaily Brief
Gerdau Renegotiates Loan Covenants
Brazilian steelmaker Gerdau has renegotiated leverage covenants on $3.7bn worth of bank loans, according to Monday filing with the CVM. The change will cost Gerdau between $20m-$60m, it says. The outlay will presumably go towards paying amendment fees and higher margins on the facilities to reflect increased risk to banks. Gerdau was heard to have paid banks an amendment fee of 25bp. Two of its recent dollar facilities were launched last year paying 125bp and 150bp. The covenant renegotiation involved more than 40 banks, says Gerdau. A recent drop in economic activity has hurt the steel sector, which analysts and executives say was already long overdue for a cyclical downturn following years of rising prices. Gerdau’s leverage covenants now state net debt to Ebitda must be below 5.0x, compared to a previous gross debt to Ebitda ratio of under 4.0x. It now must also have a Ebitda to net interest expense ratio higher than 2.5x, compared to the previous Ebitda to interest expense ratio floor of 3.0x. Finally, maximum consolidated gross debt must not exceed $11.0bn. Gerdau says it expects its revenues to stabilize by 2010, which will allow the company to reestablish its prior loan covenants.