Category: Bonds

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.

The IDB says that it will increase the program limit for its trade finance facilitation program to a maximum of $1bn from $400m. It says it will also add loans to its offering of guarantees and support non-dollar-denominated trade finance transactions. The enhancements come in response to the global financial crisis. The TFFP comprises a network of 198 confirming banks from 70 international banking groups, and 41 issuing banks in 15 LatAm and Caribbean countries, with $756m in approved credit lines.

Cabei has priced a TWD1.9bn ($57m) 2-year fixed rate bond in the local Taiwan market at par to yield 2.60%. The issue is the third tranche from a TWD7.0bn program, following a mid-December issue of TWD1.3bn, and a TWD1.8bn follow up Tuesday. The Central American multilateral wanted to wrap up the third piece before Chinese New Year, a Cabei official says, and a fourth is likely in February. The lender rated A2/A minus is also planning 2 issues in other countries for January or February. HSBC is sole bookrunner on the TWD issuance.

Cabei has priced a TWD1.8bn ($54m) 2-year fixed rate bond in the local Taiwan market at par to yield 2.60%. The issue is the second tranche from a TWD7.0bn program, following the mid-December issue of TWD1.3bn. Three institutional investors bought into the deal, Cabei treasurer Felix Magana tells LatinFinance. It featured a gradual, non-public book building process where the size of the issue is tailored to investor demand. Three different buyers participated in the first tranche, he says. “It was very important to launch a deal at the end of the year as a message to the markets,” Magana explains. He says a third tranche can be expected later this month, with a fourth likely in February. The lender rated A2/A minus is also structuring 2 issues in other countries for January or February, he explains, declining to state where. Cabei has now issued 5 times in Taiwan, a member nation of the Central American multilateral bank. HSBC is sole bookrunner on this and the first series of TWD issuance.