Category: Loans

Moody’s has put the Baa1 rating of Hipotecaria Su Casita’s Construction Loan Trust Variable Funding Notes, series 2005-1 cross-border securitization on review for possible downgrade. The agency says that challenging trends in the Mexican home construction sector are more severe for transactions that are still in the revolving stage and that have concentrations of housing developments targeting the higher-end and tourist sectors. These challenging trends, says Moody’s, increase extension risk, or the risk that some construction loans may not fully amortize by the transaction’s final maturity date due to the longer construction and sales cycles, which increases the risk of losses to investors. Three other transactions issued locally (including Su Casita’s HSCCB08 and Credito Inmobiliario’s CICB08 and CICB06) were also placed on review for possible downgrade in a separate rating action, Moody’s adds.

Telmex says it has prepaid a $1.3bn loan due October 20. The 3-year tranche was signed in August 2006 and paid Libor plus 20bp. It was part of a $3bn package that also included a $1bn 5-year loan and $700m 7-year loan, led by ABN AMRO, BBVA and HSBC. Telmex had MXP63.28bn in long-term debt as of June.

Loan activity in LatAm and the Caribbean is down sharply year-to-date compared to the same period in 2008. According to Dealogic data, loan volume to the region is down 53.6%. While YTD only 52 loans worth $18.9bn have been announced, as of July 28 of last year, 112 loans worth $29.1bn had been made public. The drop is loan value between the same periods is 35.1%.

Aluminum producer Aluar has placed $50m in 2014 bonds at Libor plus 300bp on Argentina’s domestic market, according to brokers managing the sale. The bonds feature an 18-month grace period, and a mechanism to adjust the coupon at each interest rate period based on the price of aluminum, with investors guaranteed minimum all-in return of 6.5%. Proceeds from the sale, rated A+/Aa3 on a national scale, will fund investments and refinance existing debt. Citi and SBS managed the transaction, the first from a $300m shelf. Aluar is also preparing to raise funds through a local share offering of up to ARP500m. Separately, turbine producer Industrias Metalurgicas Pescarmona (IMPSA) has placed ARP200m ($53m) in 2012 bonds at the Badlar private rate plus 6.75%. Proceeds from the A/BBB+ deal will fund investments. Banco Macro managed that sale.

Bimbo has prepaid $135m from a $900m loan supporting last year’s acquisition of Weston Foods’ US operations. The loan, due 2012, pays Libor/TIIE plus 250bp, and was part of a package signed in January that also includes a $800m 5-year loan at Libor plus 300bp and a $600m bridge. The Mexican bread maker repaid the bridge earlier this month using proceeds from a MXP10bn domestic bond sale. Citi, BBVA, Bank of America, HSBC, ING and Santander all served as lenders and managers of the domestic bond sale.

Drillship sponsor Etesco has raised $650m for a new 10-year Petrobras drillship concession. The deal includes a $380m commercial tranche with a 2.5-year construction period at Libor plus 325bp and an abbreviated post-completion period of 6 years at Libor plus 300bp, say project bankers on the deal. Challenging market conditions led Etesco to opt for a shorter post-completion period, which means it will need to refinance the facility within the coming several years in order to guarantee funds for the full 10-year contract. The commercial portion was split between 4 bookrunners and 2 MLAs. SMBC, Mizuho, Tokyo-Mitsubishi and ING led the deal, each taking tickets of around $72m. MLAs Standard Chartered and Societe Generale joined the group later with $50m tickets, says a banker on the deal. A $270m ECA tranche financed by Norway’s Export Finance and guaranteed by the same country’s credit insurer Giek makes up the remainder of the facility. Pricing on the ECA tranche is heard to be a little under the commercial portion, paying a fixed rate. The funding will be disbursed by the end of the year, when the $160m or so in equity financing Etesco has contributed to the project has been spent, say bankers close to the process. The deal, in the works for close to 12 months, strikes an encouraging tone for a challenged part of the LatAm project finance market. Odebrecht’s $850m 10-year drillship project financing has been struggling to bring in commitments, though a recent adjustment to price has given the transaction momentum and bankers away from the deal say they believe it will close eventually. Schahin has a concession similar in size to Odebrecht that it will look to finance in the loan market too, either at the end of this year or in 2010.

Peru’s Interbank has priced a $121.2m 7-year final, 5-year average MT100 at 425bp over 3-month Libor, in line with expectations, according to a banker on it. The deal was sold two thirds in Peru and the rest offshore in a simultaneous placement, exploiting price tension with local investors who are used to tighter levels, adds the banker. Locals were apparently allowed to treat the deal as a domestic issue for regulatory purposes, increasing the potential sol-denominated bid. Target size was $100m-$150m but the deal was capped to minimize spread. Deutsche was sole lead on the BBB rated issue. The transaction was initially expected in March, to consist of a $120m 6-year and $30m 10-year at 150bp over Peru 5-year CDS. At recent levels, Interbank’s all-in cost was expected to land in the mid to low 400s. In late March, Bradesco placed a $100m DPR via WestLB. Pricing came in the mid to low 200bps area over Libor, say people familiar with the terms. Bankers are eyeing new markets for DPRs, including Chile and Mexico. MT100s are done either on a biltateral basis with an underwriter, or placed with a select group of institutional investors, such as insurance companies and multilaterals. More structured supply is anticipated from Mexico soon.

Brazil’s Odebrecht has flexed by 40bp the pricing on a $850m 10-year drillship project loan to Libor plus 340bp, stepping up to 415bp through the final year, say bankers. The move has helped spur commitments to the facility, say executives involved, who expect closure within 2 weeks. Most of the banks eyeing participation demanded a higher margin than the Libor plus 300bp-375bp originally offered. An executive involved in the deal says 3 banks – presumably the leads Santander, BNP and SocGen – have taken tickets of over $100m. Two more lenders have also signed on, one taking a $75m ticket and the second $50m. The change in price brings Odebrecht more in line with other ongoing syndications, including AES Campiche’s downsized and shortened $220m 7-year offering 350bp-400bp, and Pacific Rubiales’ $250m 4-year facility that starts at 550bp. The Odebrecht deal is part of a $1.3bn debt financing for a Petrobras twin platform concession. Some $450m in development and ECA financing from Giek and Kexim is also expected to meet the balance.

Pluspetrol’s Peru unit has launched syndication of a 4-year $100m facility offering Libor plus 425bp, say bankers away from the deal. Calyon is leading the facility, which has a 1-year grace period and is backed by sales from the Camisea project. Like other LatAm energy borrowers, Pluspetrol is making use of its assets to help raise funds. Pacific Rubiales in Colombia and BPZ in Peru are also heard close to finalizing loans backed by reserves. Pluspetrol Camisea, as the deal is called, has apparently been launched to a broad group of banks. Tickets of $30m offer 137.5bp, while a $20m piece will earn 125.0bp, say bankers away from the process. “For a secured deal, the pricing is good,” says a banker eyeing the transaction. He notes issuers will continue to leverage assets, including reserves and future flows, to raise funds in the current tight liquidity environment.