Category: Bonds

ICE, Costa Rica’s national power and telecom company, will in the next two months raise $381m in long-term financing via the IDB and the syndicated loan market to support its infrastructure development in that country. The IDB is targeting a $200m 15-year A loan and a $181m 12-year B loan that will be syndicated out in the bank market. An official close to the process says using project finance-like covenants on the facility will allow lenders to monitor performance of the borrower and the loan over time. This is also the first IDB loan to a quasi-sovereign without a sovereign guarantee, marking a deliberate effort by the multilateral to broaden its private sector mandate. A bank meeting will be held in the second week of January and syndication will likely be wrapped up by the end of February.

Bladex, the Panama-based supranational bank, has named Jaime Celorio as its CFO, effective February 22. Celorio was previously with Merrill Lynch and Goldman Sachs and replaces Carlos Yap, who leaves Bladex after 27 years to pursue other opportunities.

Cabei, the Honduras-based multilateral, is arranging a loan worth up to $52.1m for Colombia’s Hidroelectrica del Teribe. Proceeds will finance a 31.3MW hydroelectric project in Panama. The plant is part of the Central American regional SIEPAC initiative.

Fitch has upgraded Cabei to A- (stable) from BBB+. The agency notes an improvement in the credit quality of Cabei’s founding members, a strong capital base despite vigorous growth, a return of private sector exposure to historic levels and the enhancement of several self imposed corporate governance rules and control techniques. It also highlights Cabei’s preferred creditor status, strong capital base, good asset quality and established track record in terms of self sustainable profitability. Limitations include the volatility of the economic environments in which the institution operates, significant loan concentration and the member countries’ creditworthiness. “The ratings also factor in relatively high average exposure to the private sector,” says Fitch. “As Cabei is one of the few providers of medium-term financing to the region, Fitch considers that its shareholders have a vested interest in supporting it should it run into difficulties.” The Honduras-based bank is 59% owned by its five founding member states: Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. The remainder belongs to Argentina, Colombia, Mexico, Taiwan, Spain, Dominican Republic and Panama. The bank’s usable capital/required capital ratio remains relatively strong at 2.7x at end-June 2007, says Fitch.

Ecuador has secured a $62.2m 20-year loan from the IDB for the renewal of the TAME Línea Aérea de Ecuador aircraft fleet. The deal carries a national government guarantee, has a one-year grace period, and pays a variable interest rate. “The program will facilitate integration and connectivity in Ecuador, especially among the country’s most isolated and disadvantaged areas, through improvements in the operations and commercial air transportation services provided by TAME,” says IDB team leader Esteban Diez-Roux. “The aircraft fleet will be renewed and the company’s business capacity will be strengthened,” he adds. The deal supports the purchase of two Embraer ERJ-190AR aircraft to modernize TAME’s fleet and improve the provision of air services.

Amid the stormiest conditions of the year for LatAm borrowers, the Colombian arm of Spain’s Telefonica has launched an A/B loan worth $600m. The IDB and four other bookrunners – Citi, BNP, ABN AMRO and Santander – are syndicating out a $475m 5-year amortizing loan paying 125bp over Libor out of the box, based on a leverage grid, say bankers familiar with the terms. Pricing moves on a leverage grid between 4.0x, where it pays 150bp over Libor, and under 2.5x, where it pays 75bp over Libor. Current leverage is 3.0x-3.5x and the deal has 3 years’ grace. MLAs are being offered $50m tickets for an up-front fee of 50bp. Lead arrangers can take $35m for a 30bp fee, while arrangers can have a $20m ticket for 15bp. Bookrunners are apparently seeking five MLAs. The IDB is also doing a $125m 7-year A loan, which pays 145bp over Libor out of the box. Poor timing will test the deal, which has been waiting in the wings for months. In the past week, credit market conditions have deteriorated further, sapping bank market liquidity at a time when lenders typically close up shop. Given this backdrop, the transaction, whose bank meeting was heard to be underattended, may struggle to gain momentum. Telefonica will likely have to wait until January to wrap up syndication.