Category: Bonds

Santiago Levy Algazi, a former Mexican deputy minister of finance, is joining the IDB as chief economist and general manager of its research department. The academic and expert in social programs brings public sector experience to the bank in his roles as general director of the Mexican Social Security Institute, deputy finance minister, president of the Federal Competition Commission and director of the economic deregulation program at the trade ministry. He designed a conditional cash transfer program known as “oportunidades,” which assists more than 5m of Mexico’s poorest households. He also worked as a consultant to the UNDP on poverty reduction policies. Levy replaces Guillermo Calvo, who left the IDB to become director of Columbia University’s program of economic policy management.

The IDB has approved a $12.5m, fast-disbursing grant to support Haiti’s management of public sector resources. This grant, which will be disbursed in a single tranche, could be followed by a similar grant in 2008, says the IDB. The financing is for a broad range of projects in Haiti, with emphasis on basic infrastructure, such as highways and rural roads.

The Board of Directors of the Inter-American Development Bank (IDB) have approved its first private sector financing for a bioenergy project in Brazil for a total of US$120 million to Usina Moema Acúcar e Alcohol Ltda., a major sugar, ethanol and bio-energy producer based in the State of São Paulo, that is operating in one of the fastest growing industries in Brazil and worldwide. This operation is part of IDB’s initiative to promote the structuring of senior debt financing for five Brazilian ethanol production projects that will have a total cost of US$997 million. These investments will contribute to Brazil ‘s goal of tripling annual ethanol production by 2020.

The Goldman/ICA group has secured a commitment from Santander to provide financing for the $4.1bn toll road package. In April, The IDB pledged up to $400m for a partial credit guarantee to enhance bond or bank loans denominated in Mexican pesos for terms longer than 25 years. The package is for Maravatío-Zapotlanejo, Guadalajara-Zapotlanejo, Zapotlanejo-Lagos de Moreno, and León-Lagos-Aguascalientes tollroads.

Venezuela has approved two loans, totaling $614m, from multilateral lenders IDB and CAF. Caracas-based Andean Corporation has already approval a loan of $600m towards the construction of the Tocoma hydroelectric plant, due to be operational by 2014. This will be the second loan by CAF granted to the project – the first was for $300 million in 2004. The IDB loan is for $14m and is aimed at environmental issues in the Caroni river basin.

CAF, the Andean multilateral is looking to extend out to 20 years with its Peru bond program, setting a long duration benchmark for Peruvian entities, Gabriel Felpeto, director of financial policies international issues at the bank tells LatinFinance. “We’re trying to do long term bond issues in local currencies,” says Felpeto. “We’re looking at doing issues in the Peruvian market up to 20 years,” he adds. CAF has already done 12 years in soles and is looking to do at least 15 years in that market. Felpeto adds that CAF’s A/B loan structure is also being used to lengthen duration for domestic entities.

CAF, the Andean multilateral is planning a trailblazing issue in Bolivianos, the first time in recent memory a bond deal has been done in that currency. CAF is working with the regulators in Bolivia and expects to issue there in 2008, Gabriel Felpeto, director of financial policies international issues at the bank tells LatinFinance. Meanwhile, CAF is planning more debt issuance after it approved earlier this week $1.3bn to fund various projects across Latin America. It tends to issue roughly 50% in dollars, 20% euros and the rest in local currencies, though Samurais are also an option.

Pemex has $1bn-$2bn in funding needs for this year, roughly half of which will come from export credit agencies (ECAs). It already has lines with Eximbank, JBIC and European ECAs. With pre-funding for 2008, the market target is around $1bn, which will be placed locally later in 2007, Pemex associate managing director of finance Mauricio Alazraki tells LatinFinance. “This will be done opportunistically. It’s not a necessity,” says Alazraki. “It could be a longer dated bond, 20 or 30 years,” he adds. “The whole curve is open.” Pemex is also considering fine tuning the dollar and euro curves, substituting illiquid bonds with larger more efficient issues. But pesos are the most attractive after the swap. “The market that’s cheapest is the local market. Certificados bursatiles, if you translate to dollars, it’s the cheapest funding source,” says Alazraki, who has extensive experience in all of the debt markets open to Latin issuers. “For the bulk of our funding needs in the future, the Mexican market is the main option. Probably, after that it would be the bank market,” he adds. (For more on this interview, see www.latinfinance.com).