Samarco has cut the size of its 7-year club loan to $335m from the $400m after the Brazilian iron ore miner expressed an unwillingness to budge on pricing, say bankers. Banks were not heard dropping out of the transaction, but were thought to be unwilling to increase ticket sizes at the final margin of 150bp over Libor. “At that spread and tenor the banks that came in to the deal were not willing to commit $100m each, so the ticket sizes were reduced,” says one syndicated loans banker involved in the transaction. In the end, HSBC and WestLB joined Bank of Tokyo Mitsubishi, Mizuho and SMBC, each participating with $67m tickets. The transaction is in documentation and is expected to close at the end of this month. 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.
Category: Loans
World Bank Approves El Salvador Loan
El Salvador will receive a $100m loan from the World Bank. Proceeds will be used to expand the government spending for basic social services in rural and urban areas. The loan will address shortcomings in tax administration and is expected to bridge a shortfall in revenues of $98m. The goal of the program is to increase the country’s total tax revenues to 14.8% GDP from 13.3%, a nominal increase of $368m by 2012. Tax revenues as a percentage of GDP are low in El Salvador and represent a constraint on expanding public services and social aid. In 2008, tax revenues were about 27% of GDP on average in OECD countries, while they were about 16.1% in LatAm and 13.0% in El Salvador. The loan has a 30-year maturity period, including a 5-year grace period.
Correction: Votorantim Seeking Jumbo Loan
A June 3 brief titled “Votorantim Seeking Jumbo Loan” misstates the division seeking the loan as Banco Votorantim. It is Votorantim Industrial.
Votorantim Seeking Jumbo Loan
Banco Votorantim has put out an RFP for a dual-tranche loan for around $2.7bn, according to market participants. It is heard to be looking for a $1.5bn 5-year revolver and a 7-year export pre-payment loan for around $1.2bn. The deadline for proposals is the end of next week say loan bankers, who expect the deal to be heavily oversubscribed. “This is a great company, so this will be a home run for them,” says one New York-based syndicated loans banker. Another adds that pricing is expected to be aggressive. “It is not a surprise that they are coming to the market with these longer tenors and can expect to achieve attractive pricing, given the success of the Vale and America Movil loans,’’ adds another syndicated loans banker. Bankers agree that the lack of paper in the loans market means the company could get flexible terms on the deal. America Movil priced a $4bn dual-tranche loan in April, made up of a $2bn 3.5-year tranche, priced at Libor+50bp and a $2bn EUR equivalent 5-year tranche priced at Libor+ 60bp. Vale also closed a $3bn 5-year revolver priced at Libor+ 60bp in April.
Mexico Airport Group Gets Loan
Grupo Aeropotuario del Pacifico has received a 7-year MXP1.02bn ($88m) credit line at TIIE+165bp from HSBC, according to a stock exchange announcement. The fee for structuring the loan is 100bp and the cost for commitment of funds is 30bp in 2011 and 40bp in 2012. The loan will help finance capital investments in 2011 and 2012 for the Guadalajara, Puerto Vallarta, Los Cabos, Hermosillo and Guanajuato airports, which it operates.
Pemex Trading Closes Loan at $1bn
PMI has closed its 3-year syndicated loan amendment for $1bn, according to market participants. The trading arm of Mexico’s state-owned oil company, Pemex, had originally planned to upsize and amend a 3-year syndicated loan from $500m to $700m, then said it would be upsized to $900m, say market participants. Pricing is heard to be Libor+ 125bp, say bankers with knowledge of the transaction. The original deal priced in June 2010 at Libor+ 225bp. BBVA, Calyon, Natixis, RBS and SocGen, who were the leads on the original deal returned to lead the amended deal. The other participating banks were Banamex, Banco Nacional de Comercio Exterior (Bancomext), Bank of New York, Bayern LB, BNP Paribas, Caja de Ahorros y Monte de Piedad de Miami, Comercia, DZ Bank, EDC, HSBC, Intesa, JP Morgan, Mizuho, Nova Scotia, and SMBC.
JBS USA Gets $475m Loan
JBS, the Brazilian beef company, has priced a $475m 7-year term loan through its US subsidiary, according to a company release. The loan was priced at 300bp over Libor. The loan will be used to repay shorter term and more expensive debt, adds the company. JBS said it is also working on an $800m asset backed loan, which it said it will price in the next few weeks.
Uruguay Heard Marketing Samurai
Uruguay is said to be whispering a yield of yen Libor+ 42bp-48bp for a new 10-year yen-denominated bond it plans to sell in Japan next week, according to a person following the deal. The sovereign is scheduled to hold a group presentation Thursday, and hold other investor meetings around it, ahead of what is expected to be a JPY40bn ($490m) samurai deal guaranteed by JBIC. Daiwa and Nomura are managing. Panama was the most recent issuer from the region in the Japanese market, with a 10-year Samurai with a 1.81% coupon priced at par to yield yen Libor+ 48bp in January, while Mexico priced a 2020 bond guaranteed by JBIC in October which priced at par with a 1.51% coupon, to yield yen Libor+ 50bp. Uruguay’s last Japanese bond was a JPY30bn 2.23% 10-year done in 2007.
JBS USA to Take $400m Facility
JBS USA will take a $400m 2018 term loan B facility, according to Fitch. The term loan is in addition to plans for the US subsidiary of the Brazilian beef producer to issue $1bn in 2019 NC3 and 2021 NC4 bonds. The loan is rated BB by the ratings agency, because of the company’s strong business profile as the world’s largest beef and pork producer and as the second biggest chicken producer. However, the ratings agency adds that the company’s risk profile is above average because of cyclical risks associated with the meat business and the company’s aggressive growth through acquisitions. Though the credit profile of the company is expected to benefit from the integration of recent acquisitions, its margins will be pressured by high cattle and grain prices, adds the ratings agency.
Pemex Trading Upsizes Loan Amendment
PMI will upsize a 3-year syndicated loan from $500m to $900m, according to market participants. PMI, the trading arm of Mexico’s state-owned oil company, Pemex, had originally been heard looking to upsize the January 2010 loan up to $700m. Market participants say the company is now looking to increase the size further in response high demand. The deal is expected to close May 26, after originally being expected to close May 6. PMI had extended the deadline for commitments as some banks asked for more time to respond, says a banker with knowledge of the transaction. Pricing is heard to be 125bp over Libor, say bankers with knowledge of the transaction. The original deal priced at Libor plus 225bp. Bank meetings were held in New York in April. Existing lenders were given the option of increasing their tickets and new banks were also invited. Around 30 banks are said to have attended the meeting. BBVA, Calyon, Natixis, RBS and SocGen, which were the leads on the original deal, have returned to lead the amended deal.