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Rekindling Loans
International banks are eager to re-enter the LatAm bank market. But cost of funds, spread compression and better DCM terms will keep a lid on volume.
Credit Suisse is back on top again, aiming to leverage relationships throughout emerging markets to further stoke the coals of its LatAm investment banking engine. The Swiss house coasts on rising revenue from M&A, equity and fixed income, but has not slipped into complacency.
At a time when the syndicated loan market was still thawing from a deep, crisis-driven freeze, Americas Mining Corporation (AMC), a wholly-owned subsidiary of Grupo México, provided an encouraging sign.
In just three months of extremely choppy external markets, Project Jaguar scored a coup.
Brazil is on a path for record-breaking M&A volume and sky high valuations this year, but advisory fees are lagging.
Banco Continental has signed a $40m syndicated A/B loan via the IDB, which will go towards increasing lending to small and mid-sized businesses. The A loan, from the IDB, is for $25m and is for 5 years, with a 2 year grace period. The B loan is divided into 2 tranches. The first tranche is a $5m 3-year bullet funded by Dexia Micro-Credit Fund, managed by BlueOrchard. The second tranche is for $10m, with a 5-year maturity and 2-year grace period. Participants were responsAbility SICAV (Lux) Mikrofinanz-Fonds and responsAbility SICAV (Lux) Microfinance Leaders, managed by responsAbility Social Investments. It is the first loan in Paraguay to be syndicated by the IDB. “We expect to see more transactions to fund financial institutions committed to providing financing in a way that is relevant to development and financially sustainable,” Daniela Carrera-Marquis, head of the IDB’s financial markets division, tells LatinFinance. “Investors are becoming more interested in transactions that are financially viable, but also contribute to sustainability,” she adds.
Banco Itau Chile has signed a $200m 2-year syndicated loan, which it upsized from the $150m originally planned, following oversubscription. Closing and funding is expected Friday. HSBC, RBS, Wells Fargo, Commerzbank, Citi, Bank of America, Credit Agricole and BNP Paribas are joint leads on the transaction. Each of the banks committed $25m, according to bankers with knowledge of the transaction. Retail commitments were heard to have come from 2 other banks, one of which was a Taiwanese bank. The spread on the loan is Libor plus 90bp, with proceeds being used to lend to Chilean corporates.
Banco de Chile is looking to borrow a $150m 3-year syndicated loan via Standard Chartered and Wells Fargo, according to bankers with knowledge of the transaction. The bank is heard to be looking to launch the transaction this week in Asia. Bankers away from the deal expect pricing at 110bp over Libor, which one banker says is attractive pricing for the borrower.
The state of Espirito Santo in Brazil will receive a $175m loan from the IDB to improve ground freight and passenger transportation on its highways. The loan is for a 25-year term, with a 5-year grace period, priced basis Libor. The state government will provide an additional $75 million in local counterpart funds.
Brazil’s Embraport will get an A loan from the IDB for $100m and a syndicated B loan for $300m from a group of international banks, says the IDB. The loan will be for construction, operation and maintenance of a new container and liquids terminal in the port of Santos. Embraport will also receive a separate loan from Caixa Economica Federal of Brazil, which will complete required long-term debt financing needed. Both loans will be long-term, to match the project’s repayment profile. The new terminal will ease congestion, reduce costs and allow the port to receive new, deeper-draft container ships, adds the IDB.
