Category: Bonds

CAF has priced a $250m reopening of 5.75% 2017 notes at 98.007 to yield 6.041%, or 235bp over UST, in line with guidance of 235bp. “As a quality issuer, we feel it’s always important to come out in the market,” CAF VP of finance Hugo Sarmiento tells LatinFinance. “We saw this quiet period in the market as a good time to increase the liquidity of our dollar bonds.” He declined to disclose the order book size, but said it included many repeat buyers from the original $500m 2017 offering. Proceeds from the A+/A1 transaction will help expand the project loan portfolio. Credit Suisse led the sale, with HSBC and Merrill Lynch as co-managers. Sarmiento says CAF expects to follow a similar investment plan to 2007, with about $1bn equivalent to be issued. It counts dollar, Euro, and Yen issues and well as local issues in Peru Colombia and Mexico among its options.

Colombia has tapped Viviana Lara, senior executive in charge of infrastructure investment at CAF, to replace Julio Torres as head of public credit. Lara had formerly run the public credit bureau for the city of Bogota and worked in the Hacienda’s public credit department as well. “She has a lot of experience and is a very good selection,” says Torres of his successor. Market participants also lauded the nomination, saying Lara’s technical expertise is more than adequate for the role. She joins a team that includes Maria Catalina Escobar, head of international capital markets and Adriana Osorio Rincon, head of multilateral financing. The latter two were already at Hacienda and worked under Torres. Torres’ departure has been in the works for more than three months, he tells LatinFinance. Lara, who takes over public credit on February 2, has her work cut out. Colombia needs to issue an estimated $6bn in TES this year, a 30% increase over 2007, and do so amid adverse market conditions that could lead to higher spreads. “This year will be a very difficult year for TES issuance, especially given how much of it has to get done,” notes Ricardo Duran, head of economic research at Corredores Associados in Colombia. He believes Lara is a good choice for the role.

The IDB will make a non-sovereign guaranteed loan of up to $100m to The Currency Exchange (TCX), a hedge fund launched by the Dutch development finance company FMO. The subordinated loan will enable the IDB to use TCX’s services to swap up to $600m into LatAm and Caribbean currencies, expanding its capacity to lend in local currencies. In addition, the IDB will sell a $2.5m portion of the TCX loan to its affiliate, the IIC, to expand local currency lending to small and medium-size enterprises in the region. “The deal with TCX allows us to take a new approach to increasing the availability of flexible lending denominated in our borrowing member countries’ own currencies,” says IDB project team leader Ira Kaylin. “This is particularly important for clients in countries where currency swaps are not yet feasible.” Separately, the IDB has granted Argentina a $600m conditional credit line to promote rural agricultural development. It also approved a $200m 25-year variable-rate loan, as the first transaction under the 10-year credit line. Proceeds will benefit a program through the country’s economy ministry to boost rural economies by improving competitiveness and increasing agricultural exports.

The $488m financing has closed for the Brazilian deepwater oil drilling rig sponsored by Delba and Interoil. WestLB arranged the transaction, which featured a $100m commitment from the IDB in the form of an A/B loan. Pricing on the $460m 10.5-year project loan and $12m working capital facility starts at 237.5bp over Libor, stepping up to 250bp at completion. A $12m short-term facility pays 125bp. Participants Dexia, DVB, KfW, Depfa, Itau BBA, Natixis, Cifi, Caterpillar Financial and Nordkap took tickets of $10-$60m, having been pared down from $75m commitments. The $130m in financial equity was placed with German Private Equity Firm MPC Capital.

Venezuela will receive a $600m loan from CAF to finance the Tocoma hydroelectric project, the CAF said. The proceeds will fund a portion of the $3bn power generation project developed by state utility CVG Edelca on the Caroni river in the southern Venezuela. The deal marks CAF’s second loan for the 2.1 gigawatt project after $300m lent in 2004. The government hopes the project, to be complete in 2014, will increase the country’s generation by 15%.

The IDB has approved a $300m 15-year conditional credit line to the Argentine National Agrifood Health and Quality Service for investment projects. A first $100m loan from the facility, guaranteed by the Argentine Government, is for a 25-year term with a 5-year grace period. It follows an IDB strategy agreed with Argentine authorities to promote competitiveness in agricultural development policy. Local counterpart funds for the loan total $43m. The deal will strengthen and expand the country’s capacity to protect and improve agricultural, agrifood and fisheries health and quality.