Caracas-based multilateral CAF says it is sitting pretty for funding and in no hurry to come back to the bond market. “We’re not in a rush. We have very high liquidity and we are waiting for conditions to improve,” Gabriel Felpeto, CAF’s director of financial policies and international issues tells LatinFinance. CAF returned last week to Colombia’s local market with an oversubscribed bond issue at apparently attractive levels. It issued Tuesday COP245bn ($110m) total, split between an 11.25% of 2013 and an 11.79% of 2018. Pricing was equivalent to 65bp over TES, while other Triple As came recently at 100bp-120bp over TES and 65bp was in line with the target, he adds. “We didn’t have the need this year but we had the opportunity,” says Felpeto. The deal through BBVA was the debut from a COP1trn 3-year CAF program and the first from the multilateral since 2004. Felpeto adds that CAF is looking at tapping other local currency like Peru and Mexico, while also monitoring the USD market. CAF was hit last week with a negative outlook from S&P on its A+/A-1 rating amid concerns about exposure to Ecuador, which is in default, as well as Venezuela and Argentina. The multilateral is among the region’s highest rated borrowers and typically leads the way back for issuers when markets slam shut.
Category: Bonds
IDB Lends $500m to Costa Rica
The IDB has approved a $500m loan for Costa Rica. The funds will help the country’s central bank extend lending in dollars to local financial institutions so that they can channel additional credit for working capital and trade financing to exporters and other enterprises within the export chain. The loan is for a 5-year term, with a 3-year grace period, at 400bp over 6-month Libor on an annualized basis.
Castano Departs UBS DCM
Antonio Castano, executive director in the LatAm DCM group, has left UBS, according to a source at the company. Castano, a former deputy general director of public credit in Mexico, joined the Swiss bank in early 2004. The recent departure leaves Marcelo Delmar as the only senior person left in the shop’s DCM group following various rounds of departures that saw the exit of Nadine Cavusoglu and Jorge Barreda earlier this year. As with most other firms, the bank is downsizing its debt team in line with anticipated shrinkage in issuance volume next year.
Cabei Taps TWD
Cabei priced this week a TWD1.3bn ($40m) 2-year fixed rate bond in the local Taiwan market at par to yield 2.60% from a TWD7bn program. The transaction followed investor meetings in Taipei with both existing and new accounts. Taiwan is a member country of Cabei and of strategic importance to the Central American multilateral financial institution, which has now issued five times in TWD since 1997. Cabei is rated A2/A minus. Settlement is December 29 and maturity December 29 2010. HSBC was sole bookrunner.
IDB Lends $2bn to Mexico
The IDB has approved a $2bn credit line for Mexico to help it reduce poverty levels. An initial loan of $200m within the conditional credit line for investment projects will be provided. It is for a 25-year term with a 2-year grace period, at an adjustable interest rate based on Libor. Mexico’s Sedesol will carry out the program through the national Oportunidades coordination board. This operation is the third to Mexico for Oportunidades since it was launched in 1997. Two previous IDB loans totaled $2.2bn, says the bank.
CAF Returns to Colombia Debt
CAF has returned to Colombia’s local market with an oversubscribed bond issue at apparently attractive levels. It issued Tuesday COP245bn ($110m) total, split between an 11.25% of 2013 and an 11.79% of 2018. Pricing was equivalent to 65bp over TES, Gabriel Felpeto, CAF’s director of financial policies and international issues tells LatinFinance. Other Triple As priced recently at 100bp-120bp over TES and 65bp was in line with the target, he adds. “We are very happy with the transaction given the environment,” says Felpeto, who adds that it was 2.4x subscribed. Some 50 investors participated, including pension funds, insurance companies, banks and asset managers. The deal through BBVA was the debut from a COP1trn 3-year CAF program and the first from the multilateral since 2004. This week’s issue was geared at boosting Colombia’s domestic market, but Felpeto says it was also attractive in terms of price, at just 5% equivalent coupon in dollars. “We were asked by the ministry of finance to issue in that market. They need some more issuers to help investors diversify,” says the official. The offer was not rated locally, but based on the international grading, the offer would have been a Triple A.
Argentine Beer Bonds Lose Fizz
Bonds from Argentine brewer Cerveceria y Malteria Quilmes have come off sharply over the last week, more because of Argentine risk in general than anything credit specific, according to analysts. Credit Suisse had the $120m 7.375% of March 2012 bid at 80 late last week, down 20% versus 100 the week before, and most other Argentine corporate bonds are quoted below 50. “Different refinancing options they had are really drying up due to the government’s nationalization of the pension system,” says Joe Bormann, corporate analyst at Fitch, speaking of Argentine corporates in general. Fitch, which rates Quilmes BB, put the beer maker and several other Argentina-based corporates on negative watch in late November, following news of the nationalization. Only a couple of Argentine names – in the energy and telecoms sectors – are trading above 80, Credit Suisse data shows. Analysts generally see the sovereign headed for disaster, with a negative impact inevitable for corporates.
IDB Loans $80m to Uruguay
The IDB has approved a loan of up to $80m to Uruguay so it may improve its sewer service. An initial loan of $43m will be used by the country’s National Water Supply and Sanitation Administration and the IDB could approve additional financing for a total of $80m. The loan is for 25 years with a 4-year grace period and an adjustable interest rate. It will be disbursed over a four-year period. Local counterpart funds for the program total $39.5 million.
IDB Funnels Funds into Argentine Wineries
The IDB has approved a $50m loan to Argentina’s government so it can help small-scale grape growers boost income and carry out investment plans. The program will be carried out by the Argentine Agriculture Department and Coviar, a public-private corporation that promotes Argentina’s wine and grape industry. The loan, which was approved on December 10 by the IDB’s board, has a 25 year tenor, with a five-year grace period and an adjustable interest rate. Local counterpart funds for the program total $25m.
Prolec Buys Stake in Indo Tech
Mexico’s Prolec-GE, a joint venture between General Electric and Xignux, has agreed to buy a 54.35% stake in Chennai-based Indo Tech Transformers. It has also initiated a public offer to acquire an additional 20.00% stake in the Indian company. Citi, the offer manager, says in a letter to the Indian stock exchange that the value of the 54.35% stake amounts to R2.3bn or almost $48m. The additional 20% stake is valued at about $17.6m.