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.
Category: Bonds
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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.
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IDB Lends to Uruguay Innovation
The IDB has signed a $34m 25-year floating rate term loan with 6-years’ grace to help create and diversify products to reach new markets. The technological innovation facility aims to enhance Uruguay’s international position to compete and achieve greater integration into the world economy by diversifying export markets. It is also aimed at weaning the country off a dependency on public sector funds for research and development. The National Research and Innovation Agency (ANII) will carry out the project.
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Unidas, Paranapanema Debentures Are Go
Brazil’s CVM has approved a BRL250m debut debenture issue from rental car agency Unidas. The 2012 notes will pay interest at the DI rate plus 2.75%. Itau is managing the sale. CVM also approved a BRL950m convertible debenture issue from metals producer Paranapanema. That offer will come in two series: a BRL200m 2010 tranche paying the IPCA inflation rate plus 6%, and a BRL750m tranche paying IPCA plus 9%. Santander is managing the sale. Separately, developer Trisul has started its debut BRL200m 2013 issue, paying DI plus 2.5%, via Bradesco.
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Fees and Volume Diverge in DCM
Often the big debt trade in LatAm is not the most lucrative for underwriters, and this year’s Dealogic DCM league tables show significant divergence between volume and revenue. Top of the volume charts is Deutsche Bank, with $3.99bn in credit from 9 deals in the year to July 23. But the German house only comes fourth in the fees rankings, with $7.49m, or 5.63% market share. Credit Suisse is the only other top 5 DCM volume player that also appears in the top 5 for deal revenue. The Swiss shop comes second for bond issuance, with $2.79bn in 13 trades, and first for fees, with $11.36m year-to-date, or 8.53% of the market. Half Deutsche’s flow so far in 2008 can be attributed to a $4bn Venezuela sovereign deal sold locally that it shared with Barclays in April. Barclays is number 5 for volume but fails to make top 5 for fees. Nor is the UK shop in the top 10 for LatAm investment banking revenues overall. Meanwhile, BBVA and HSBC also make the top five for DCM volume but fail to achieve a similar standing when it comes to fees. RBS, Itau and Citi are the other three top five revenue shops. They generate more fees than volume numbers would suggest, according to Dealogic data.
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Further Colombia Rate Hike Unlikely: Barclays
No further hikes are expected in the near future from Colombia, according to Jimena Zuniga, an economist at Barclays. “The last three adjustment decision happened when inflation accelerated significantly and unless something like that happens again, the most likely scenario is to leave the rate unchanged at the present level in the upcoming months,” she says. Colombia’s central bank increased its benchmark interest rate by 25bp to 10.00% from 9.75% Friday citing inflationary pressures boosted by food price increases, as well a moderate growth indicators.