Category: Bonds

Belize hopes to have greater access to financing after becoming a non-founding beneficiary of the Central American Bank for Economic Integration (Cabei). Belize applied to become part of the Bank last August. The Bank currently has 10 members, of which five – El Salvador, Nicaragua, Guatemala, Honduras and Costa Rica – are founding members and five are extraregional members: Argentina, Colombia, Mexico, Spain and Taiwan. Panama and Dominican Republic are also hoping to join.

The Central American Bank for Economic Integration (Cabei) has approved a $37 million loan to Nicaragua for the design and construction of its Larreynaga hydroelectric project in Jinotega. The power plant, which is set to take two years to complete, will have an installed capacity of 17MW and will help towards making up the country’s energy shortfall by boosting Nicaragua’s output by 3%. The country has seen a growing energy crisis this year and a mounting number of power outages.

The region’s largest multilateral lender, the Inter-American Development Bank (IDB), said Friday it had member agreement on a framework for debt relief for Bolivia, Guyana, Haiti, Honduras and Nicaragua. The Bank gave no final details of the agreement and concluded that a board of governors meeting in January 2007 in Amsterdam will define technical details for the implementation of the new debt reduction framework, with a presentation of agreements to be given in the Bank’s March meeting, due to be held in Guatemala City. The debt forgiveness will total between $2.1 billion and $3.5 billion, according to experts.

The Inter-American Development Bank (IDB) is considering launching a local-currency bond in Argentine pesos to add to those already issued in Mexican, Colombian, Chilean and Brazilian currencies. IDB president Luis Alberto Moreno has been visiting Argentina and has signed up to $1 billion in loans from the Bank to Argentina. According to reports in the Argentine media, Moreno and Central Bank president Martín Redrado have agreed to form a working party with experts from both institutions to examine the issue. The IDB, through its financing arm – the Inter-American Investment Corporation (IIC), most recently issued a local-currency bond in Colombia last December. The Corporation successfully placed 150 billion pesos ($66 million equivalent) of the five-year bonds.

CAF, the Caracas-based Andean multilateral, has priced a five-year euro-denominated bond issue, its first since May 2004. The EUR300 million FRN due November 16, 2011 priced at par to yield 40bp over Euribor. It was rated A1/A/A+ and done through Calyon and HSBC. Guidance was mid-40bps over three-month Euribor. The issue was expected to be at least EUR200 million and came more than seven times oversubscribed, according to a person close to the transaction. The Reg S deal was under London law and will be listed in the UK. Sales to Italy were 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.

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.”