Category: Loans

AES Gener, sponsor for the Angamos mining project, says its all in cost of funding has not been adversely affected by a surge in funding costs and widening credit spreads. “Libor is down and spreads are going up,” says Tobey Collins, CFO of AES Gener in Santiago. “From an all-in cost perspective, we ended up better off,” she adds, declining to illustrate the claim with specific numbers. The company’s most recent financing is the $989m 17.5-year project loan for Angamos via BNP and RBS. A year ago, US 6-month Libor stood at 4.86% while last week it was quoted at 2.62%, according to Bankrate.com. Collins says AES Gener plans to swap the dollar loan into local currency using some of the banks that participated in the facility. She declines to comment on a change in the reference rate for the first disbursement of the loan. Globally, AES and its subsidiaries have $847m in debt due in 2009 and $1.51bn in 2010. As of September 30, its total liquidity stood at $5.64bn.

Carlos Corona, a director in Citi’s combined debt group, has left the firm as part of a round of layoffs earlier this week. Loans expert Corona was one of four execution bankers for LatAm at Citi, focused on Mexican clients. He worked on deals for CFE and Pemex in the past year. People close to the firm says his departure marks a loss for the group. No other mid-level or senior bankers were let go. Citi has conducted several rounds of layoffs at all levels of seniority this year and the next is set to take place in January. It has announced 52,000 redundancies globally.

Chilean timber producer Celulosa Arauco is preparing to sell dollar and UF-denominated bonds in the local market. A 2014 dollar-denominated tranche of up to $355m will be priced at Libor plus 1.80%, and 2014 and 2029 tranches of up to UF10m ($333m) each will offer coupons of 3.50% and 4.25%, respectively. The notes are rated AA on a national scale. Arauco will target retail with the dollar and shorter UF piece, while the longer term is heard marketed to the country’s pension funds. The grower and pulp producer with operations in Chile, Brazil, Argentina and Uruguay will use proceeds to refinance short and long-term debt. IM Trust is managing the transaction.

Arcos Dorados, the holding company for McDonald’s’ LatAm assets, has accepted a sizable increase in its cost of funds for a $350m 5-year facility. The deal, originally launched at Libor plus 275bp, will now include an extra 150bp spread to compensate banks for their rising cost of obtaining capital from other banks. Similar to Braskem, which recently closed a $725m 5-year deal, the borrower was asked by banks to include the additional spread after the deal had been launched. The difference is that Arcos agreed to take on the extra cost for the entire life of the 5-year deal, while Braskem lenders must address the issue every six months, if necessary. With banks funding themselves at spreads over Libor of 100bp-200bp, corporate borrowers in need of funds are likely to feel the ultimate impact. Bankers say the pipeline for loans is enormous in the region, and a slew of deals is set to be launched as soon as market conditions stabilize. Santander and Scotia are joint bookrunners for Arcos, with the former taking a lead role. Bradesco, a relative newcomer to international syndications, signed on as an MLA. A private equity consortium led by former McDonald’s executive Woods Staton and Gavea Investimentos owns Arcos.

Caros Fadigas, Braskem’s CFO says he’s looking at potentially swapping his $725m pre-export debt, which is priced over Libor, into fixed-rate. The facility was closed with a group of 19 banks last week at a rate of Libor plus 175bp, with fees ranging from 70bp-35bp depending on ticket sizes. “We’re very happy with our Libor plus 175bp price now, but if wee see the opportunity to lock in at what we think is a historically low rate, we will consider it,” Fadigas tells LatinFinance. He adds a fixed rate at an all-in cost of 550bp to 650bp would be considered attractive. Braskem has a gross debt load of BRL8.8bn, 70% of which is denominated in dollars. The company has no speculative exposure to derivatives, says Fadigas.

The IDB’s investment arm, the IIC, has raised a $70m equivalent 3.5-year yen-denominated loan with a club of Japanese banks. The all-in cost for the funds is heard at less than Libor plus 50bp, say people familiar with the terms. The AA minus credit tapped Mizuho, the lead bank on the deal, as well as Shinkin Central Bank, Chuo Mitsui, and a Japanese regional bank. The funds are being used to lend debt and invest in equity in the region.

Syndicated loan volume from LatAm and the Caribbean plummeted 49% in the first three quarters of 2008 versus the corresponding period of last year, according to Dealogic. Borrowers raised some $37.0bn in the period as the bank market tightened up and corporates stepped out. LatAm is the least active EM region in the period for loans, with volume relatively in line with the $30.4bn raised in India and the subcontinent. Southeast Asia bucked the global trend with a 50% surge in activity to $49.0bn. Europe and North America contracted at a similar rate to LatAm, hitting $775bn and $945bn, respectively. Bankers say LatAm corporates are sitting comfortably with their maturities, having taken advantage of rock-bottom spreads to refinance aggressively between 2005-2007 at tenors of 5 and 7 years. Dealogic data shows LatAm corporates face aggregate maturities through the end of the year of just $4.1bn. Deals slated to mature between October and December include a $620m facility for Pemex, $600m from PDVSA, $561m at Grupo Kuo and a $300m CSN transaction.

Chile-headquartered retailer Cencosud has landed $140m in loans from the IFC and three commercial banks for its Argentine unit. A $90m syndicated B loan carries a margin of Libor plus 110bp for 5 years, with a 2-year grace period. ABN AMRO, BBVA and Santander formed a club to lend the funds, all of them taking MLA and bookrunning titles. The IFC provided $50m in long dated funds, heard at 8 years, with an undisclosed margin. While proceeds go to an Argentine company, banks are heard to have framed the loan to their credit committees as a Chile credit. Cencosud Chile is providing a 100% guarantee to the facility, says a banker on the deal. In January, Cencosud raised $480m in 5-year funds whose pricing steps up from 50bp over Libor to 65bp throughout the life of the facility. Proceeds were used to pay for G.Barbosa in Brazil.

Project loan financing for La Muralla III, an offshore platform being built for Pemex, is heard closed at just under $600m. The deal consists of a 2.5-year construction period at Libor plus 175bp and a 5-year post-completion, also at 175bp. Terms and conditions remained the same throughout syndication, say people close to the process, which suggests a degree of consistency with market expectations. Pemex offtake is a strong point for the deal. The funds will finance the first deepwater ship the Mexican oil company, which is headed to deeper waters as it looks to replenish its falling reserves. BBVA and WestLB led.