CAF has approved a total of $1bn in loans to Brazil, Bolivia, Ecuador and Uruguay. The Caracas-based multilateral approved a $400m credit line for the Uruguayan ministry of finance to support its public debt management strategy. Ecuador received a $310m loan for relief efforts for natural disasters and to finance the Quito road network, says CAF. For Bolivia, the multilateral approved $250m for an economic infrastructure program in marginalized areas administered by the country’s ministry of planning and development. And for Brazil, CAF approved $100m for a road pavement program aimed at improving road connectivity lead by the road infrastructure department of the state of Paraiba, notes the multilateral.
Category: Bonds
Posted inDaily Brief
Bladex Hires Merrill’s Vera
Panama-based development bank Bladex asset management unit has hired Tulio Vera, Merrill Lynch’s former head of EM research who left the firm earlier this year, apparently on his own accord. Vera will be chief strategist and head of client relations for the development bank’s asset management business, it said Thursday. The executive will be based in New York and be responsible for identifying investment opportunities and expanding Bladex’s reach to third-party investors. He will report to Manuel Mejia, head of Bladex Asset management. Vera, a native of Chile and a heavyweight in EM research, is heard to have sought new opportunities within Merrill before leaving the firm. His departure coincided with the rise of Felipe Illanes and Pablo Goldberg to new roles within EM research and strategy.
Posted inDaily Brief
CAF Issues Swiss Bonds
CAF has tapped the Swiss franc market, raising CHF200m ($194m) in 2013 bonds at 100.065 with a 5.00% coupon to yield 4.985%. The offer was upsized from CHF100m on demand of just over CHF200m, say executives on the deal. More than 20 institutional and private investors participated, they add. “It’s a high-quality market that we’ve been looking at for a while,” Gabriel Felpeto, CAF’s international director, tells LatinFinance. He explains CAF’s most recent presentations in Switzerland were important in getting the deal done during a rough week for LatAm bonds. The A+ transaction makes CAF the first LatAm issuer in Switzerland in three years and the second in ten, says Felpeto. He says this issue is part of the $500m equivalent it plans to complete in different markets and currencies by the end of the year. Credit Suisse managed the sale.
Posted inDaily Brief
Peru LNG Closes Project B Loan
Peru LNG has received the funds from the syndication of a $400m IDB syndicated B loan and lenders are now heard redistributing their portions of the facility to secondary lenders. Pricing in the 3-year pre-construction period is heard to have been bumped up to 100bp from 75bp. In years 4-5, the first two years of the construction period, pricing remains at 100bp, stepping up to 120bp in years 6-10 and 150bp in years 11-15, says a banker close to the process. Up front fees for $50m tickets are heard at 60bp, while $40m tickets will receive 50bp. For $30m ticket, fees are 40bp, says a banker involved. SocGen and BBVA led the financing with a handful of MLAs, including ING, Mizuho and Sumitomo Mitsui, supporting the deal. Peru LNG also obtained a $300m IFC A loan, a $400m IDB A loan and a $150m direct loan from the Export Import Bank of Korea.
Posted inDaily Brief
Eletrobras Brings Long-Dated Financing
Brazilian power utility holding company Eletrobras will today launch syndication for a $450m B-loan, part of a $600m CAF A/B financing. Proceeds to the state-owned BBB minus credit are destined for capital expenditures. The 7-year B-loan carries a margin of Libor plus 150bp and amortizes in years 4-7. CAF, meanwhile, is lending Eletrobras $150m in 12-year funds — a significant tenor for a Brazilian borrower. The deal, joint led by Citi, BNP and SocGen, is being launched amid much fanfare despite the long tenor, and is heard already counting on MLA support from Natixis, ING, BBVA, Santander and Sumitomo, says a banker close to the process. “Going forward we will be doing a lot more lending in Brazil and Argentina,” a CAF official tells LatinFinance, referring recent commitments of $500m from each country to the development bank, to be disbursed over the next five years. Today’s deal marks the third time Eletrobras has tapped CAF for funds, the first loan having taken place in 2003, says the official. A second bank meeting in Sao Paulo is scheduled for Wednesday.
Posted inDaily Brief
Cabei Approves Food Program
Cabei has established a $300m program to help offset a food crisis in Central America. The mechanism seeks to increase local production of food staples to cut the dependence on imported goods, the bank says. The program provides for a $50m line of credit to be distributed equally among the bank’s members, plus $40m for each country to establish a trust to help boost food production. The program also allocates $10m for a public-partner partnership in each country for infrastructure project. The bank has 5 member countries: Guatemala, El Salvador, Costa Rica, Honduras and Nicaragua.
Posted inDaily Brief
HSBC Picks Up Capital Markets Pace
European heavyweight HSBC appears to be picking up the pace in LatAm capital markets, consolidating a top 5 DCM position in the year to June. The bank has done a slew of high profile trades for the likes of Pemex, Femsa, Infonavit and the Brazil sovereign to land at number 4 in the Dealogic league table through June 23, with close to $2.5bn in proceeds from 19 deals. That compares to fifth place a month earlier and ninth this time last year, when it had $1.2bn credit from 8 trades. The shop is heard with a decent short-term pipeline, including a sovereign bond, two corporates and a Samurai trade for a Mexican entity, understood to be the first LatAm name in that market since 2001. The balance sheet player is developing a niche in acquisition finance, with a handful of large Brazil and Mexican trades apparently on their way to market. HSBC is trying to convert a traditional senior lending role into revenues from M&A advisory, and it is expected to announce some senior hires in that department soon. “We are trying to finance transactions where we are going to get the full spectrum of the business and establish a long-term relationship with the client,” Gerardo Mato, co-head of global banking for the Americas at HSBC tells LatinFinance. LatAm equity remains slow for the bank, which is not in the Dealogic ECM top 10 for the LatAm year to date. But a bookrunner role on Vale’s upcoming $14bn transaction coordinated globally by Credit Suisse should help change that.
Posted inDaily Brief
Mexican DCM Suffers Lack of Confidence
Mexico’s institutional investor base is flush with cash but a lack of confidence and heighted aversion to risk is keeping that money from flowing into the debt markets, according to local DCM bankers. Credit troubles in the US are largely to blame, say the bankers, who note plain vanilla deals are being chopped from the average MXP3bn size seen in 2007 to a MXP1.0bn-MXP1.5bn range this year. Structured finance deals are getting hit much worse, with number of deals being affected noticeably, say the executives. If conditions improve towards the end of the year, bond issue sizes might return to the sizes seen last year, says Gerardo Tietzsch, head of corporate finance at Ixe.
Posted inDaily Brief
Banxico Seen Continuing Rate Hikes
Following last week’s surprise Mexican rate hike, which dragged down stocks, analysts anticipate further monetary tightening this year. Banxico raised the overnight rate by 25bp to 7.75% Friday, its first change since October. “We do not view this as the start of a long tightening cycle and we tend to think that the bank may require less of a tightening than the curve is currently pricing in (50bp in six months),” says Credit Suisse. Morgan Stanley meanwhile revised its prediction for the year-end rate to 8.00% from 7.50% previously. “Hiking interest rates in Mexico today is akin to buying fire insurance: the subsequent absence of a fire is hardly valid criticism of the decision to purchase insurance in the first place,” adds the shop, rejecting criticism of the move at a time of slower growth. Morgan Stanley also adjusted upward its Mexico inflation forecast for 2008 to 4.3% from 3.8% and for 2009 to 3.5% from 3.3%. Inflation has been on an upward trend since the start of the year, rising from 3.70% in January to 5.00% in May, mostly caused by the effect of high international prices for food and energy.
Posted inDaily Brief
IDB Approves $58.5m Loan for Argentina
IDB has approved a $58.5m, 25 year adjustable interest rate loan to the province of Rio Negro in Argentina for an extended school day program to promote educational opportunities for primary school students from low-income families. The loan, guaranteed by the Argentine government, has a 5-year grace period. Local counterpart funds for the loan total $6.5m.