Category: Loans

Retail syndication of a $3.7bn peso-equivalent loan for Mexico’s FARAC toll road concession is moving along slowly with little fanfare. Some MLAs want to reduce and are arranging to sell down portions of their holdings to new participants. The process is being coordinated by Santander but the syndication looks more like a secondary market sale than a unified process. Some of the leads, like Banobras, are not keen on reducing their ticket sizes. Once all the banks agree on reductions, they must all execute a sale on the same day, expected to be in January. So far, only a few banks have expressed interest in a piece of the peso-denominated loan and the final number of retail participants will only be known when they all sign together. One banker close to the process says banks may get reduced by $25m and $50m, short of the expectations of some MLAs holding $150m, who were expecting to get cut by 50%. The loan is a 7-year stepping up from 165bp over Libor in year one to 185bp in years two and three, 200bp in years four and five, and 225bp in years six and seven. Santander led the transaction from its Mexico office. It was joined by bookrunners Dexia, NordLB, HSBC and Banorte and the following MLAs: Inbursa, Banobras, ING and WestLB.

Retail syndication of a $3.7bn peso-equivalent loan for Mexico’s FARAC toll road concession is moving along slowly with little fanfare. Some MLAs want to reduce and are arranging to sell down portions of their holdings to new participants. The process is being coordinated by Santander but the syndication looks more like a secondary market sale than a unified process. Some of the leads, like Banobras, are not keen on reducing their ticket sizes. Once all the banks agree on reductions, they must all execute a sale on the same day, expected to be in January. So far, only a few banks have expressed interest in a piece of the peso-denominated loan and the final number of retail participants will only be known when they all sign together. One banker close to the process says banks may get reduced by $25m and $50m, short of the expectations of some MLAs holding $150m, who were expecting to get cut by 50%. The loan is a 7-year stepping up from 165bp over Libor in year one to 185bp in years two and three, 200bp in years four and five, and 225bp in years six and seven. Santander led the transaction from its Mexico office. It was joined by bookrunners Dexia, NordLB, HSBC and Banorte and the following MLAs: Inbursa, Banobras, ING and WestLB.

Chilean retailer Cencosud launched this week a $490m 5-year amortizer which it hopes to close in January, a month expected to be very busy in the loan market. The deal steps up from Libor plus 35bp in year one to 40bp in year two, 45bp in year three and 60bp in years four and five. The loan amortizes by 25% in years three and four and the remaining 50% in year five. Participants will get fees of 25bp for a $50m ticket, 17.5bp for a $25m ticket and 12.5bp for $15m. Santander is leading the deal and BBVA and BNP have already joined as bookrunners.

Argentine aluminum company Aluar is in the market with a $150m 3.5-year loan at Libor plus 115bp, according to bankers close to the deal. The loan is secured by receivables and will look to close by the end of 2007. The facility is being led by Calyon and JPMorgan and should be conducted as a club deal, with the company’s relationship banks expected to participate.

Argentine aluminum company Aluar is in the market with a $150m 3.5-year loan at Libor plus 115bp, according to bankers close to the deal. The loan is secured by receivables and will look to close by the end of 2007. The facility is being led by Calyon and JPMorgan and should be conducted as a club deal, with the company’s relationship banks expected to participate.

Venezuela’s state-owned oil company PDVSA is looking to refinance a $1.125bn 1-year facility it took out in January. The existing financing, led by BNP Paribas, pays Libor plus 100bp, and PDVSA will look to refinance at similar terms, according to bankers close to the process. It was tightened from an initial 115bp launch following an upgrade. A bank meeting is scheduled for November 26 in New York and BNP is again leading the process. Given today’s market conditions, PDVSA may find it difficult to clinch the kind of pricing it would have got just a few months back. A margin above 100bp looks likely. Credit committees have become more risk averse and syndicators are finding their home offices are far more willing to veto deals with risky profiles at a time that their own cost of funds is rising. On PDVSA’s current facility ABN AMRO is an MLA with a $175m ticket, followed by arrangers BLADEX, with a $130m ticket, and Banco do Brasil and JPMorgan, each with $100m tickets, according to Dealogic. PDVSA has ratings of BB minus/B1.

Banco Itau has this week taken its $200m 2-year loan to general syndication. The facility pays Libor plus 40bp, and counts on ING, Unicredit, HSBC, Unicredit, BofA and Standard Chartered as MLAs. Calyon has the books.

Santander’s Brazilian arm is raising $200m in the international loan market for working capital and trade-related funding. A $50m 3-year working capital facility has already been subscribed by MLAs, and pays 55bp over Libor. A $150m trade facility is now being syndicated out to retail at 45bp over Libor. Both tranches are bullets. So far, Wachovia, Calyon and Bank of Tokyo Mitsubishi have joined as MLAs. Standard Chartered is running the book.

Brazil’s Grupo Votorantim has tapped WestLB to arrange a 1-year bridge financing of between $600m-$800m for its acquisition of a cement company. The 1-year loan is heard to be paying well under 50bp over Libor, according to bankers away from the transaction. A group of MLA candidates has been tapped and a retail syndication is expected in early 2008. In November 2006, Votorantim Cimentos acquired Ribeirao Grande, a Brazilian cement company, for $195m, according to Dealogic.

Brazil’s Itau SA has sent out invitations for participation in a $200m 2-year facility last week. The deal will pay Libor plus 40bp plus an up front fee of 25bp, say bankers away from the deal. MLA tickets are $30m apiece. Calyon has sole books.