Category: Bonds

Cabei has again added to its growing Taiwan bond issue, placing TWD1.5bn ($45m) in 2013 bonds at par with a 2.7% coupon. This is the fourth tranche from the Central American development bank’s offering that began in December, which now totals TWD6.5bn. The previous three consisted of 2.6% two-year notes. HBSC is managing the sales for the TWD7bn program. A2/A minus-rated Cabei also recently issued $19m-equivalent in local Costa Rican bonds and plans to place additional issues in at least two more domestic LatAm markets, and possibly a European market.

CAF has agreed to provide a $400m contingency loan to Peru to help mitigate the effects of the global economic crisis. The line is part of the $1.5bn in available lines CAF pledged in October 2008. The facilities are to be used by CAF’s member countries. There is no set time limit on the use of the funds, a CAF spokeswoman says. She declined to give the interest rates associated with the use of the credit line.

The Central American Mezzanine Infrastructure Fund (CAMIF), a vehicle backed by multilateral lenders, has reached a first closing of $82.5m, according to the IDB, one of its main investors. The IDB has committed up to $60m, though its stake can’t make up more than 40% of the capitalization, says an IDB official, who declined to be named or give further details. “In this market very few players are able to provide funding for Central American infrastructure projects,” says the official, noting this sector can support demand in these economies during times of crisis. CAMIF is looking at a few projects, but has not yet disclosed any allocations. The IFC has committed $40m in the form of a 12-year subordinated loan, and Cabei has put in $15m in equity, according to officials at those banks. After being approved in 2006, the fund’s backers struggled to develop the appropriate structure and only began securing commitments last year. The fund received more than $150m in commitments, officials say, but the specific limitations of its three-part investment structure – debt, mezzanine and equity – limited investment to the $82.5m. CAMIF will offer mezzanine lending for private sector-led infrastructure projects primarily in Belize, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua and Panama; it will also look at Mexico and Colombia. The fund is managed by EMP Global partners and also includes the Netherlands’ FMO and a government-backed fund of funds called Corporacion Mexicana de Inversiones de Capital as investors. Officials declined to provide an expected maximum size for CAMIF.

Central American development bank Cabei has placed CRC10.4bn ($19m) in local bonds in the Costa Rican market. The issue is the first placement by a foreign issuer in the domestic market, according to Cabei CFO Jose Felix Magana. The 5-year notes pay interest at the Tasa Basica Pasiva (TBP) benchmark rate, and were priced at 92.9 to yield TBP plus 200bp. TBP was at 11.25% Thursday, according to Costa Rica’s central bank. The issue is the first from a CRC26bn program, and should be followed by other tranches, Magana says. Six Costa Rican pension funds bought the deal. Magana says proceeds were swapped into dollars, but that future funds from the program may be kept in CRC, as the bank has some liabilities in the currency. Cabei is no stranger to exotic DCM, having placed $157m equivalent in three placements of 2-year bonds in the Taiwanese market, with a fourth from the program expected in February. Magana says Cabei plans to issue locally in two other LatAm countries this year and is considering an issue in Europe. Citivalores Accival managed the Costa Rica transaction.

The IDB has approved a $300m loan to Jamaica so the island can compensate for shortfalls in credit inflows caused by the global financial crisis. The loan has a 5-year term, a 3-year grace period and is priced at 400bp over 6-month Libor.

The IDB has moved to make life easier for its sovereign clients with changes affecting some $36bn in debt, representing some 75% of the IDB’s sovereign loan portfolio. In a move one internal official describes as somewhat overdue, the multilateral is giving borrowers the option to receive the interest rate they pay on their loans in a more standardized format. Until this month, borrowers were simply shown a blanket rate they must pay without being able to see the components that determined it. As such, liability management, including the use of hedging, was made near impossible. With the new system, clients can elect to receive interest rates either as a spread over USD Libor, fixed rate, or a combination. “More and more, clients want to be able to do their own hedging and have been asking [the IDB] to take it to the next step,” says a senior IDB official involved in implementing the change. The move will not affect loans to projects and private sector clients, which have long benefitted from the newer system.

The IDB is extending $50m in long-term concessional financing to Ecuador’s fishing communities. Financing will be complemented by $23m in local counterpart funds, the bank says. Of the total amount of the loan, a $38.08m portion has an amortization period of 30 years, a grace period of 5.5 years and a variable interest rate. A $9.52m portion has an amortization and grace period of 40 years and a 0.25% interest rate. The remaining $2.4m has an amortization period of 20 years and a grace period of 4 years. The interest rate will be based on Libor.