Mexican conglomerate Alfa is heard to be offering a spread of 300bp over Libor on a leveraged grid for its syndicated loan to back the $600m purchase of Eastman Chemical assets in the US. A $600m 3-year bullet facility is expected to be syndicated. Invites have been sent out but meetings have not been fixed, according to people close to the transaction. Meetings are expected first in Mexico City, followed by New York. Credit Suisse and HSBC are the leads. Alfa’s purchase of Eastman’s polyethylene terephthalate resins business and related assets and technology of its Performance Polymers segment was done by Alfa unit DAK Americas. BAML advised Eastman while HSBC worked on the buyside. Fitch downgraded Alfa subsidiary Grupo Petrotemex to BB (stable) from BB+, including notes issued by DAK, amid fears over leverage incurred in the purchase. On a pro-forma basis, Fitch estimates that Petrotemex’s total debt-to-Ebitda, including 12 months of Eastman assets operations, could reach 3.3x in 2010 before gradually decreasing. This compares negatively with a total debt-to-Ebitda ratio of 2.2x for the 12 months to June 30, and falls outside Fitch’s prior leverage estimate of 2.0x-2.5x. Nonetheless, Fitch notes that the investment is strategic and positive for Petrotemex, and should strengthen its business as it gains PET market share in North America.
Category: Loans
Nicaragua Project Closes $160m Financing
RAM Power, a US renewable energy company, has closed $160m in debt financing, via IFC, which will go towards the second phase expansion of its San Jacinto-Tizate geothermal power project in Nicaragua. The borrower would not disclose the spread over Libor on the floating rate loan, but the company expects to swap it to a fixed-rate loan for 7%-8%. Initial drawdown is expected to occur in December 2010, with final maturity in 13 years and an 8.5-year average life for the senior debt. The $140m in senior construction and term loans and $20m in subordinated debt are available for general corporate purposes, in order to complete the second phase of this project. Combined with phase 1, it will provide 72MW of power to Nicaragua, to be completed by the end of 2011, according to Hezy Ram, CEO of Ram Power. IFC, IDB, CABEI, DEG, FMO, OeEB and Proparco were lenders on the transaction. Ram says that IFC all of the subordinated debt along with $30m in senior debt. IDB provided $30m in senior debt, with Proparco providing $20m, DEG $19m, FMO $19m, OeEB $15m and Cabei $7.6m. “We had well over $200m in demand for $140m of senior debt,” says Ram.
Odebrecht Bringing Drillship Jumbo
Odebrecht is expected to price its $1.5bn 10-year drillship bond this week, and potentially as soon as Wednesday, according to a banker on the deal. Pricing is expected to come in at the tight end of mid-to-high 6% guidance. Although investors are requesting more information on the 8.1-year, BBB/Baa3 amortizing deal through the Odebrecht Drilling Norbe VIII/IX unit, the book is still growing, according to bankers on it. Santander, HSBC, Deutsche and Banco do Brasil are managing the sale. The notes are backed by intercompany loans granted to each drillship, according to Fitch.
Peru to Get IDB Loan
The IDB has approved a $110m loan to Peru to reduce poverty by strengthening its principal social protection and labor programs. The loan comes from IDB’s ordinary capital and has an amortization period of 20 years with a 5-year grace period and an interest rate based on Libor.
IDB Gives Ecuador $100m Loan
The IDB has given Ecuador a $100m 25-year term loan, with a 4-year grace period and a variable interest rate based on Libor, to help transform the health sector in Ecuador. It will improve the quality of health services and also go towards medical information system and management of the Ministry of Public Health.
DomRep Gets $100m Loan
The IDB has approved a $100m loan to the Dominican Republic to help improve the nutrition, health and educational attainment of children and young people from low-income households. The loan is for 25 years, with a 4-year grace period and a variable interest rate based on Libor. The Dominican Republic has also recently received a $120m loan from the IDB to help enhance competitiveness, and a $249m disbursement from the IMF after a review of its stand-by arrangement.
BCP Closes Larger 3-Year
Banco de Credito del Peru has closed a $350m 3-year syndicated loan priced at 175bp over Libor, which it upsized from an original $300m. Standard Chartered and Citi were global coordinators for the bank, with commitments coming from 19 banks, including Deutsche, Commerzbank and BAML, who were MLAs. Orders reached almost $400m, according to a spokesman for BCP. Participation came from Latin America, Europe, the US and some Asian banks, adds the spokesman. The loan is for general corporate purposes, in particular to fund loan growth.
Brazil Pulp Upsizes Loan
WestLB and Santander have allocated commitments for a $470m dual tranche transaction for Brazil’s Bahia Specialty Cellulose, with the deal expected to close by next week. The pre-export financing for the wood pulp products company is divided into a 5-year tranche, which was upsized to $425m from $400m, and 7-year tranche for $45m. The 5-year tranche priced at 387.5bp over Libor, while the 7-year priced at 425.0bp over Libor. Bradesco, Itau, Bladex, BES, Caixa Geral de Depositos, Israel Discount Bank, Bancolombia, DZ Bank, Fibonacci Master Fund, Federated Project and Trade Finance Fund and Cordiant participated.
Ficohsa Talks Resort Financing
Honduran bank Banco Financiera Comercial Hondurena (Ficohsa) is in talks with several local banks to syndicate a $35m 10-year loan to finance the second phase of the Honduran Bahia de Tela resort, says Javier Atala, Ficohsa’s general manager and executive vice president. He tells LatinFinance that the USD-denominated loan should have an interest rate of about 8% and that he expects to invite multilaterals Cabei and the IFC to participate. Atala expects the first loan disbursement to happen in Q1 2011. The project, 51% owned by local investors and 49% government owned, will include a golf course, residential areas and a 5-star, 120-room hotel. Atala says Bahia de Tela is in talks with hotel chains Westin and Hilton and a US-based hotel management company about flagging the hotel. A decision on which flag the hotel will carry should be made next month, he says.
Guatemala Gets IDB Loan
The IDB has approved loans worth $250m for Guatemala to enhance the government’s capacity to mitigate climate change. The financing consists of a $213.20m, 20 year loan with a variable interest rate based on Libor, a $29.40m, 30-year loan with a fixed interest rate, and a 40-year $7.40m concessional loan with a 0.25% annual interest rate.