Category: Bonds

The Andean Development Corporation (CAF) has signed a cooperation agreement with India’s Eximbank to further the economic and social development of the Corporation’s 17 member countries. The agreement is part of a move by the Corporation to seek attract resources, goods and experience to the region from further afield, in this case India.

Panama’s Banco Latinoamericano de Exportaciones (Bladex) has signed a Cooperation Agreement with the China Development Bank (CDB) with a focus on trade and infrastructure projects in Latin America. Jaime Rivera, chief executive officer of Bladex, commented: “Bladex is committed to fostering trade and enhancing business flows between China and Latin America as a means of fulfilling its commitment to the well-being of our Region while adding significant value to our company.”

The Inter-American Development Bank (IDB) has appointed Otaviano Canuto – currently Brazilian director to the World Bank – as vice-president for Countries for a three-year term. Canuto will take charge of the four Country Departments covering the regions in which the IDB divides its operations in Latin America and the Caribbean, 26 Country Offices, and the Operations Procurement Office, said the Bank in a statement. Prior to joining the World Bank in 2004, Canuto served as director of international affairs at the ministry of finance of Brazil.

The IDB has granted a loan of $120m towards the construction of the “Northern Corridor” highway network in Bolivia. The 40-year credit will carry an annual interest below 2%. The money will finance the stretches between Santa Bárbara (La Paz) and Rurrenabaque (Beni). Construction, repair and improvement of the 377km will take around six years once the tender process has been completed, according to the Bolivian highways agency. The project is aimed at opening up access to the isolated Amazon region of the country.

The Brazilian government, through its development bank BNDES, and in conjunction with the IFC and IDB, is looking to set up a $40m fund to help plan public-private partnerships for infrastructure projects, Mauricio Ribeiro, director of Brazil’s PPP program, tells LatinFinance. “Today, the bottleneck [for PPP infrastructure projects] is not the lack of funding or the legal framework for projects. It’s the capacity to analyze, and plan these projects,” says Ribeiro, adding that on top of a slow, bureaucratic system that takes up to eight months to approve a project, Brazil’s public sector is lacking in qualified professionals to plan and direct the funds for projects, thanks to a mass departure to the private sector during the privatizations of the 1990s and early 2000s. “The main issue we have to face is that we don’t have the capacity to launch the number of projects we need to put forth in the next few years.” Ribeiro, who spoke on a panel on construction finance in Latin America at Silas, says the solution lies in an offshore fund, staffed with a team that will source top of the line consultants and planners from around the globe and prepare proposals and logistical solutions that can be presented to Brazilian lawmakers and governments for approval. In question, however, is whether the BNDES, which has recently undergone a change of leadership, will continue to support this project, which was begun under the former president Demian Fiocca. Ribeiro says the fund will be managed by the IFC and adopt the World Bank’s bidding and proposal guidelines.

Hans Schultz, head of the financial markets group at the IDB, is taking over an upgraded private sector department at the bank starting July 1. He replaces Hiroshi Toyoda, who is moving elsewhere within the IDB, and will lead a renamed structured and corporate finance department. The new unit combines what were the financial markets and infrastructure groups into a three-pronged department combining financial markets, infrastructure and a new corporate finance area. Heads of each are being hunted. The change is part of a wider shakeup being spearheaded by president Carlos Alberto that could result in up to 30 replacements in the upper ranks of the multilateral institution. The new area will be making loan commitments of $1.5bn-$2.0bn a year, versus approximately $920m in 2006, Schultz tells LatinFinance.

The Inter-American Development Bank (IDB) raised $207m on Monday via the sale of 2.25bn Mexican peso-denominated bonds, reported Dow Jones, quoting the deal manager, TD Securities. The AAA-rated bonds sold at 97.435 to yield 7.78% per annum. The bonds, which carry a coupon of 7.5% per year, mature on December 5, 2024.