Category: Loans

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.

Leading Brazilian bank Itau Unibanco suffered a sharp rise in non-performing loans in Q1 as a result of the global financial crisis. Loans overdue for more than 60 days and without generation of revenues on the accrual basis amounted to BRL13.4bn at the end of March, up 28% from the end of 2008, when the recently merged entity had BRL10.8bn in NPLs. “During the period, the adverse effects of the international economic/financial crisis spread among a number of industries, thus hurting the demand from, and income of, several economic agents,” says Itau Unibanco. “As a result, the risk associated with credit portfolios has heightened, with the strongest impact being felt on the micro, small and mid-sized companies, as well as individual portfolios,” it adds. For individual customer transactions, the NPL ratio was 9.8% in the quarter, a 170bp increase over the prior quarter. For businesses, meanwhile, the ratio reached 2.5%, up 80bp versus the end of 2008. The overall NPL ratio was 5.6% in Q1, versus 4.8% in the last quarter of 2008. Itau says its expense for “doubtful loans” added up to BRL4.4bn in Q1, up 27.5% from Q4 2008. Itau Unibanco generated Q1 net income of BRL2.0bn, with an annualized return of 18.2% on average equity, down from 27.1% in Q1 2008. Consolidated assets reached BRL618.9bn at the end of Q1. The loan portfolio, including endorsements and sureties, totaled BRL272.7bn, up 25.1% compared to March 31 2008.

Telemar has obtained a $300m loan from China Development Bank, it says. The 7-year facility pays Libor plus 250bp and features a 2-year grace period. The Brazilian telecom, also known as Oi, plans to use proceeds to finance its 2008-2009 investment activity in China with network equipment supplier Huawei. Separately, Moody’s has given an AAA national scale rating to Telemar’s planned BRL3bn bond issue in the Brazil market. The 2011 and 2012 debentures await shareholder approval, which is expected today.

Brazilian meat producer Marfrig has obtained a $75m loan from Bradesco, it says in its earnings report released late Wednesday. The 6-year facility pays Libor plus 725bp. Marfrig is also negotiating a $30m 3-year loan with Rabobank, which it expects to pay Libor plus 700bp. It does not say how it would use proceeds. Brazil’s beef producers have been hit by shrinking export demand and falling domestic prices, with Independencia and Arantes having filed for bankruptcy protection.

Loans from the World Bank to LatAm countries will increase to $14bn by the end of the fiscal year ending in June from around $4.5bn last fiscal year, says Marcelo Giugale, director of economic policy and poverty reduction at the multilateral. In FY 2010 (July-June), he expects LatAm loans to amount to $14bn or even surpass that. Giugale tells LatinFinance that that about a third of the total is in the form of deferred drawdown loans, which allow a country to withdraw funds as needed and not all at once. Giugale says that while funds are not used, the borrower does not pay interest. He adds that the World Bank forecasts zero LatAm growth this year, and warns that this will increase poverty. “In LatAm 6 million people will become poor this year. Of those, 4 million are people in the middle-class who will become poor, and the other 2 million are poor people who were previously seen getting out of poverty,” says Giugale. “It takes 2 years of fast economic growth to lift these people out of poverty,” adds the official.

Mexico-based Telmex is heard in talks with banks to address a $1.3bn August loan maturity. The facility, which was signed in 2006, includes this year’s maturity which has a margin of Libor plus 20.0bp, a $1bn 2011 at Libor plus 25.0bp and a $700m 2013 tranche at 32.5bp. The deal was led by ABN AMRO, BBVA, Calyon, Citi and HSBC. Bankers in the lead group say the company may be considering refinancing at a tenor as short as 1-year. They add that Telmex may also pursue a cheaper, longer-term extension in the bond market. Carlos Slim’s LatAm telecom is likely to experience a more than tenfold increase in pricing. Bankers say Bimbo and US pharma giant Merck are the new investment grade benchmark. Bimbo’s 3-year loan, being syndicated to retail, offers 275bp over Libor, plus retail fees of 125bp for $50m tickets. Merck meanwhile has a new $8.5bn M&A related 1-year facility heard paying 275bp. Few banks are equipped to handle requests that involve a combination of large loans and bonds at the moment. RBS, formerly ABN AMRO, may find it difficult to remain in the lead group following the announcement last week that it will be exiting several business lines and focusing on a narrow client set in strategic markets only. Citi is also heard to be increasingly selective amid trouble globally. HSBC has a firm DCM platform, while BBVA and Santander also appear open to discussing bonds. The three are seen as the likeliest leads for the forthcoming Telmex deal. MLAs on the original facility are BofA, EDC, Santander, ING, Mizuho, SocGen and Scotia, while leads are BTM, Barclays and Sumitomo. Arrangers are BNP and Wachovia, co-arrangers are JPMorgan, Deutsche, Sanpaolo IMI and TD, while managers are Rabobank, Credit Suisse and Dresdner. A Telmex IR official declines to comment.