Cabei plans to sell as much as TWD7bn ($220m) through a bond issue in Taiwan. Proceeds will fund loans to its Central American member nations. Further details are not yet available, a Cabei treasury official in Honduras tells LatinFinance. Separately, the bank announced that it has placed MXP350m in 2020 bonds in Mexico, denominated in the UDI inflation-linked unit, at fixed-rate of 4.44%, via Bulltick. The development bank likes to spread its funding around the globe, issuing MXP750m in Mexico in May and THB2.37bn ($77m) in Thailand in November, both through Citi. It has issued in Japan, Hong Kong, Singapore, and previously in Taiwan. CABEI has 13 member nations, including Taiwan and 6 other non-regional members.
Category: Bonds
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Mexican Paper Meets Scissors
Bonds in Mexican paper and packaging company Corporacion Durango have tumbled into the low 40s – implying a high probability of default – down around 40% since the start of July. Distressed experts are heard positioning in the $520m 10.5% of 2017 – which was sold at par in October 2007 – in the hopes of a snap back or ample recovery if the company defaults. It was quoted at 42.75-43.75 Monday, up slightly from 42.50-45.00 Friday, in sporadic flow. The dive from the mid-70s July 1 is attributed to offloading by hedge funds needing cash but struggling to find a bid. On October 5, the company is scheduled to make a $26.5m coupon payment on notes due 2017. “I don’t think [bond prices] reflect any logical recovery value,” says Jim Harper, head of corporate research at BCP Securities, which has a strong buy recommendation on the bonds. “I expect them to make the [October 5] payment,” he adds. Durango ended June 30 with $35m in cash and marketable securities and $12m of short-term debt, according to Fitch, which rates the firm CC, implying 31%-50% recovery in the event of a default. Payment of the coupon is in the balance. “It has nothing to do with Ebitda this quarter – they have enough cash already – but rather their outlook for the business,” says a US-based distressed investor who asked not to be identified. He adds that if the owners see costs moderating and price increases sticking, Durango may well muddle through. But if 2009 looks bleak, it may choose to restructure. “Recoveries through a restructuring should be over 80 cents in PV of debt with more equity added in,” estimates the analyst. Durango launched the struggling B+ rated 10NC5 issue last year via Merrill Lynch to refinance debt. It was seen as something of a comeback for the company, which has since hit hard times. “We expect results to remain weak,” says Miguel Rincón, Durango’s chairman and CEO in a Q2 earnings statement.
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Costa Rica Bags Record Infrastructure Package
Costa Rica has secured $850m in an IDB conditional credit line for infrastructure projects, as well as the first individual loan, a $300m financing for roads. The IDB says the deal represents the highest amount approved for Costa Rica in the multilaterals’ history and will finance investments in sectors supervised by Costa Rica’s Ministry of Public Works and Transportation, including co-investments with municipal governments. “Considered in proportion to Costa Rica’s population, this credit line is the IDB’s largest investment in the transportation sector in the last 10 years,” says the IDB. “It will enable Costa Rica to modernize its transportation infrastructure, including roads, ports, railroads and air transportation, with an emphasis on economic and social integration.”
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IDB Lends $400m to Guatemala
IDB has approved a $400m 20-year loan to Guatemala in support of a program to improve fiscal management. The floating rate loan has a 5-year grace period. The new program will support stable macroeconomic policy, as well as improve tax administration and collection to boost equality in Guatemala, the multilateral adds. The ministry of public finance of Guatemala will carry out the program.
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IDB Backs up Amazonas Effluence
The IDB has approved a $154m loan to the Brazilian state of Amazonas to finance the construction of drainage, sewage, and solid waste collection and disposal systems in its capital, Manaus. The loan, which will be priced over Libor and will mature in 25 years with a 5-year grace period, will finance 70 percent of the total cost of the project. The facility complements another loan from the multilateral granted to the state in 2006 to begin sanitation and other water works in the Educandos/Quarenta watershed, which is located in the heart of Manaus.
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Peru Rate Hike Expectations Fueled by Inflation
Peru’s Central Bank was expected to increase its reference rate by 25bp to 6.25% last night following its monetary policy meeting, according to Credit Suisse. Although headline and non-food inflation increased slightly in July, the tightening at monetary policy is aimed at curbing domestic demand growth and at preventing second-round effects from food and fuel inflation, CS adds. In its last meeting, the bank increased its interested to 5.75% to 6%.
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TECSIS Secures $120m in IDB Loans
Tecnologia e Sistemas Avancados (TECSIS), a Brazilian manufacturer of rotor blades for wind power turbines, has inked $120m in A and B loans from the IDB to restructure debt and invest in new production lines. The deal is split 50-50 into A and B tranches and represents the IDB’s first foray into wind power equipment components. “In the context of priority given by the IDB to sustainable energy projects , the bank is also looking at opportunities to finance several wind energy projects both with private and public companies and to support countries to establish the necessary conditions to develop wind power initiatives,” says the multilateral. The refinancing will free up for investment cashflow currently used by TECSIS for debt service.
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Eletrobras Counts on Seniors for Loan
Brazilian power company Eletrobras expects to close Friday syndication of a $450m CAF B loan, say bankers close to the transaction. The 7-year amortizing facility, which pays Libor plus 150bp, appears to be closing without flex, though it counted on a strong group of senior relationship lenders to do so. Citi, BNP and SocGen led with BBVA, ING, Natixis, Santander and Sumitomo as MLAs. A very limited number of retail banks are heard to have participated. In addition to the $450m, Eletrobras secured a 12-year $150m A loan from CAF, among the longest tenors seen recently for Brazilian corporates. CAF officials tell LatinFinance the Caracas-based multilateral will be looking at a bigger number of potential deals in Argentina and Brazil thanks to recent $500m commitments from each that are to be spent over the coming 5 years.
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AEI Readies Guatemala Power Plant A/B Loan
AEI, the developer formerly known as Ashmore Energy, is preparing a $510m A/B loan package for its 300MW Jaguar Energy coal-fired power plant in Guatemala. The IDB and IFC will provide $300m split into two A loans whose values are still to be determined. The two multilaterals will then support $210m in two B loans to be syndicated by BNP Paribas, Mizuho and Scotia. The loans are expected to have minimum tenors of 14 years, with 15 years being sought for the A loans and 17 years targeted for the B loans. The transaction – among the largest project finance deals to come out of Guatemala – is expected to cost more than $700m, with AEI providing the remainder in an equity tranche. Construction is set to begin by the end of the year and finish by 2012. The facility has two 15-year PPAs with Distribuidora Electrica de Oriente and Distribuidora Electrica de Occidente, local units of Spain’s Union Fenosa.
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Techint Plans up to $15bn Rio Pipe Plant
Global pipemaker Techint plans to build a multiple part steel complex in the state of Rio de Janeiro, Joaquim Levy, the state’s finance minister, tells LatinFinance. Levy, who has been speaking with Techint CEO Paolo Rocca, says the Argentina-based firm is eager to invest in Brazil. The cost of the plant is estimated at least $10bn, and as much as $15bn. The site of the planned facility, which will produce among other things steel pipes for oil and gas transmission to be used by Petrobras, is on a plot of land belonging to Eike Batista, where the resources magnate is planning to build a port. “The property has got a beachfront that is the length of Manhattan,” says Levy of the plot. Batista’s MPX will also be building a 6,000MW power generation facility in the area to service several of new industrial complexes, as well as the southeastern region of Brazil. Techint recently secured a cash windfall from the nationalization of Sidor in Venezuela.