The IDB is trying to encourage Chinese commercial banks such as the ICBC and the Bank of China to participate in Latin American A/B loans, Hans Shulz, general manager of structure and corporate financing at the development bank, tells LatinFinance. Such banks have yet to participate in these types of syndications, but may be willing to lend on this basis, especially if the borrower has a connection with China. “They will look for Chinese links. They see this as a region that continues to grow,” says Shulz. LatAm financial institutions have increasingly tapped the syndicated loan market in Asia, luring banks from China, Taiwan and Japan.
Category: Loans
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CMPC Launches $600m Loan Package
Chile’s CMPC held bank meetings Thursday in New York to launch a $600m 5-year loan package into syndication via leads Bank of America Merrill Lynch, Bank of Tokyo Mitsubishi, JPMorgan and Scotia, say market participants. The pulp and paper company is offering Libor+65bp on a $400m term loan and Libor+70bp on a $200m revolver, which also offers a 20bp utilization fee on top of the base margin if over half is drawn. Banks will get 45bp for MLA tickets of $50m, and 30bp for lead manager tickets of $25m. European banks may consider such pricing too tight and stay away, says a banker looking at the trade.
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Lamosa Rolls Over $650m
Mexican home improvement products retailer Lamosa has refinanced $650m in debt tied to its 2007 acquisition of Porcelanite. The new debt includes a $450m 6-year dual-currency loan paying TIIE/Libor+150bp-300bp, depending on the company’s leverage levels. Lamosa also paid off $70m of its $225m second lien loan, with the remaining $155m replaced with a new 7-year subordinated loan. Scotia and Inbursa led, with a group of 5 more banks participating. Scotia had led the 2007 syndicated deal, including a $675m dual-currency loan paying Libor/TIIE+200bp, and a $75m 3-year revolver. The second lien loan had been separately negotiated at the same time with the Ontario Teachers’ Pension Plan.
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CMPC Preps $600m Loan Package
CMPC is heard preparing a $400m term loan and $200m revolver, according to market participants. Additional details on the facilities were expected to emerge at a bank meeting scheduled for today. The Chilean pulp and paper company deal has mandated Bank of America Merrill Lynch, Bank of Tokyo-Mitsubishi, JPMorgan and Scotia as leads. CMPC last tapped the loan market in 2008, for a $250m 5-year at Libor+55bp, via BBVA, BNP Paribas, BOTM, Santander and Export Development Canada. It has since borrowed from the bond market twice, for $500m each in 2009 and 2011.
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Grupo Mexico Considers Funding Options
Grupo Mexico may seek up to $2.4bn or more in funding depending on how various projects evolve in its infrastructure and mining divisions, Daniel Muniz Quintanilla, the company’s CFO, tells LatinFinance. The company is looking to raise $500m in the loan market as it starts building the La Caridad power project in Sonora State, Mexico. The borrower is currently receiving proposals from banks to finance the project, in which Grupo Mexico will act as sponsor and offtaker. This comes as the issuer awaits approval to take control of airport operator Grupo Aeroportuario del Pacifico (GAP), which could require up to $1.5bn in funding depending on how many holders tender their shares. Grupo Mexico currently holds a 25% stake in GAP. Financing could take the form of a loan and takeout, but the company hasn’t made a clear decision yet, adds Muniz. The borrower may also require financing after winning the toll road concession to build and operate the Salamanca-Leon toll road in Mexico. With development bank Banobras offering 30-year funding, the borrower is leaning toward this option, he says. Local financial institutions such as Banorte and Inbursa are also offering financing. About $150m will take the form of equity, with the rest coming from debt. Grupo Mexico could also move ahead shortly with its Tia Maria copper project in Peru now that the government has clarified the new tax regime for mining companies in that country. The greenfield project will require $1bn in investments, with $400m of that amount being financed through equity, he says. On a consolidated basis, the company has about $2.5bn.
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Odebrecht Seeks FPSO Financing
Brazilian construction and engineering firm Odebrecht is seeking$300m though 10-year loan as it looks to finance the conversion of a floating production, storage and offloading (FPSO) unit. Sumitomo and Societe Generale are leads. The unit is being converted in Singapore and is expected to be ready early next year.
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Samarco Closes Club
Brazilian iron ore miner Samarco has closed a $335m 7-year club loan with margins heard coming in around Libor+140bp-150bp area. In the end, HSBC and WestLB joined Bank of Tokyo Mitsubishi, Mizuho and SMBC, each participating with $67m tickets. Samarco, which is jointly owned by Vale and BHP Billiton, had originally asked for proposals on 7 and 10-year tenors, but the latter option was seen as far too ambitious, at least for international lenders. The world’s second-largest exporter of iron ore pellets closed a $400m 5-year club deal in December. BNP, HSBC, ING, RBS and SMBC committed $80m each, at a spread of 160bp over Libor. That loan was for general corporate purposes, and for funding a $3bn expansion plan for 2011.
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Vapores Asks Controllers for Debt, Equity
Chilean shipper Compania Sudamericana de Vapores is seeking a$350m in credit lines and $1.2bn in new equity from its shareholders. The move comes after price deterioration and escalating costs led to a $525m loss in the first half of the year. It plans to sign credit lines of $250m and $100m with from majority shareholders Quinenco and Maritima de Inversiones. Also, it will seek $1.2bn through an equity rights offering. The move comes after a similar $500m equity raise completed in July. Vapores also plans to seek a strategic partner for its container shipping business and will split its freight shipping business from the vessels and cargo maritime services managed by the Sudamericana Agencias Aereas y Maritimas unit.
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Braskem Puts Loan to Bed
Brazilian petrochemical producer Braskem has recently closed a $250m 5-year revolver via Bank of America, Mizuho, ING, Sumitomo and RBS. The loan was tied to a ratings grid and offered 120bp out of the box. Banks receive an extra 15bp on top of the base margins if over third is drawn and 30bp for more than two-thirds. The company recently acquired the polypropylene business of Dow Chemicals in the US as well as assets in Germany for a combined consideration of $340m. In July, it also issued a $500m 30-year bond via Bank of America Merrill Lynch, HSBC and Morgan Stanley. That deal was priced at 98.479 with a 7.125% coupon to yield 7.25%, and the bonds have been trading at around 7.25% on a yield basis.
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Telemar Seeks 3 on Revolver
Leads on Telemar’s $1.5bn 5-year revolver are still looking for three banks to participate as joint bookrunners with tickets of $200m a piece before launching into general syndication. Margins are tied to a leverage grid at Libor+90bp out of the box for a BBB/Baa2 rating, 115bp if ratings drop to BBB minus and 150bp if the credit becomes junk, says a banker considering the trade for the telecoms company. Bankers will be paid 15bp on top of the base margin if more than a third of the revolver is drawn, and an additional 30bp if over two-thirds are drawn. Leads Bank of America Merrill Lynch, Citigroup and RBS are heard committing to $500m each, but will see those levels reduced to $300m once the sub-underwriters come on board. Pricing is more or less in line with conglomerate Votorantim’s $1.5bn 5-year senior revolving credit facility, which was also tied to a ratings grid and out of the box offered Libor+85bp if proceeds were used for trade purposes and Libor+90bp for working capital.