Category: Bonds

Argentina is hoping to secure up to $1 billion in loans from the Inter-American Development Bank (IDB) over the next few days. The loans are destined for various projects including electricity transmission, satellites and social programs. Of the $1 billion agreed, around $580 million is to be allocated to an electricity transmission project in the north of the country, linking the north-east with the north-west. Argentina is the second-largest recipient of IDB lending in the region, after Brazil and ahead of Mexico, according to the Bank’s president Luis Moreno.

CAF, the Caracas-based Andean multilateral, is out with a five-year euro-denominated bond issue, its first since May 2004. The A1/A/A+ rated trade through Calyon and HSBC is talked at mid-40bps over three-month Euribor. Size is to be decided and expected to be at least EUR200 million. The Reg S deal is under London law and will be listed in the UK. Sales to Italy are accepted. CAF issued EUR150 million in a three-year FRN via BBVA and Deutsche in May 2004 with a 30bp over three-month Euribor coupon. Besides raising cash, its return to euros may be an attempt to set an example for other Latin borrowers who have long neglected this market. It will pay to keep this market open as a back-up when the dollar market becomes hostile.

The Inter-American Development Bank (IDB) has approved a $49.5 million soft loan to Nicaragua to finance improvements on a highway to the border with Costa Rica. The project will be part of the Puebla-Panama Plan for regional integration, which promotes a network of highways linking eight countries from Mexico to Panama. The new loan is for 40 years, with a 10-year grace period. Annual interest rates will be 1% during the first decade and 2% thereafter.

The Inter-American Development Bank (IDB) is considering a bond issue in Chilean pesos, either in the domestic or international markets. According to Reuters, citing IDB president Luis Alberto Moreno, the Bank will issue peso-denominated debt in the next few months. The IDB first issued debt in Chilean inflation-linked currency in August last year, worth $65 million. The Bank has already issued local-currency debt in Mexican and Colombian pesos.

Dominican Republic could implement the DR-CAFTA free trade agreement with the US as early as the end of November, according to lawmakers who passed first-reading approval to the Bill in the Senate Tuesday night. The Bill must pass second-reading approval by the Senate before two rounds of approval by the Chamber of Deputies. The implementation of the agreement will include changes to the law with regard to industrial property, intellectual property and the Penal Code. A research note from investment bank Bear Stearns, said that the Bank would view the country’s accession to DR-CAFTA before the end of 2006 as a “positive development for the credit.”

The Andean Development Corporation (CAF) has approved $135 million of loans to Peru’s financial sector. The loans will be provided in two rotating lines of credit for Banco de Crédito del Perú and BBVA Banco Continental. CAF’s president and chief executive, Enrique García explained that these operations were part of the Corporation’s efforts to support, through financial institutions, the foreign trade and working capital of companies in low-risk sectors with high value added.

The Inter-American Development Bank (IDB) has approved $105 million in partial credit guarantees to Mexican mortgage lender Metrofinanciera. “Up to $55 million in partial credit guarantees will assist Metrofinanciera in obtaining a mortgage warehouse facility of $175 million from an international commercial bank to originate and accumulate mortgage pools prior to securitization”, announced the Bank. A mortgage-backed securities (MBS) guarantee facility of up to $50 million will provide partial credit guarantees for the issuance of Metrofinanciera-originated MBS in the Mexican capital market. The Bank said it was aiming to help develop Mexico’s MBS market as well as helping the Mexican lender as it moved away from public-sector funding to raising funds via the capital markets.

Ecuador has signed a $43 million loan agreement with Andean Development Corporation (CAF) to finance the upgrading and improving of the Rafael Mendoza bridge in Guayaquil. The work will improve the only direct route between the city of Guayaquil and the rest of the country, through the Guayaquil–La Puntilla–Durán corridor. An initial loan of $57 million from CAF for the bridge has already been executed, taking the Corporation’s contribution of this stage of the project (estimated cost: $147.9 million) to almost 70%. The works are due to be completed by the end of the year.