Category: Loans

The IDB has approved a $500m conditional credit line to support the 2008-2014 investment program of Costa Rica’s state-owned utility, ICE. Loans granted from the line will be for 25 years, with a 5-year grace period and a variable interest rate. Local counterpart funds for these investments will total $120m, says the IDB. The resources will finance preliminary studies for new hydroelectric and geothermal generation projects, modernization of equipment at the Rio Macho hydroelectric plant and a program to dredge and restore the reservoirs of six hydroelectric plants to increase productivity and extend the life. Electricity demand is forecast to grow at about 5.4% a year and Costa Rica will apparently have to double its power generation capacity every 15 years. The IDB says that in next eight years alone, ICE will have to invest some $4bn in generation, transmission and distribution.

The Brazilian arm of Banco Santander has put out invitations for a $200m 3-year bullet. The financial institution is looking for $125m in trade financing at 45bp over Libor and $75m in working capital at 55bp over Libor, according to a banker away from the deal. Santander is looking for MLAs for the financing. Standard Chartered has sole books.

Colombia’s Bancoldex is syndicating a two-tranche $120m loan to finance its lending business. A $70m 1-year tranche A will pay Libor plus 20bp, though investors can expect to receive an up front fee of on average 20bp, depending on the ticket size. A 3-year tranche B pays 37.5bp over Libor, increasing to 70bp over after the up-front. Standard Chartered and Wachovia are leading the deal, and have garnered commitments from up to two institutions, according to executives close to the transaction.

Santander filed a last minute commitment to participate as an MLA on Nemak’s $640m 5-year term loan. The bank took a $75m ticket, and is the sixth to join the MLA tier that already includes BNP Paribas, EDC, Comerica, ABN and BofA. The bookrunners on the deal are HSBC, Citi, BBVA and Standard Chartered. A retail bank meeting will be held today in Mexico City. The loan pays 75bp out of the box on a leverage grid that moves between 65bp and 85bp over Libor.

Chilean generating company Empresa Eléctrica Guacolda has tapped lead Calyon and MLAs Scotia Capital and Corpbanca for a 15-year $260m loan to fund construction of a 152MW coal and petcoke-fired power plant near Maitencillo in northern Chile. The leads are said to have approached a few banks for a club deal and general syndication is also being considered. Last year, Calyon led a $390m expansion financing and refinancing of debt tied to three Gualcolda plants. The borrower is jointly owned by AES Gener (50%), local industrial conglomerate Empresas Copec (25%) and Ultraterra (25%).

Mexico’s Banorte has joined as a bookrunner the $3.1bn equivalent 7-year peso acquisition facility for FARAC, skipping the MLA tier altogether. Santander, NordLB and Dexia, the original three bookrunners, are looking for MLA participation and have up to 15 banks considering taking the $300m tickets. Banorte’s move to take a bookrunner-sized participation is evidence that there’s strong enthusiasm from locals to participate. It may also mean that prospective MLAs are hesitating to take on the all-peso risk. The MLA deadline is today, Friday, though a handful more are expected to join the group in the first half of next week.

Baja Mining mandated Unicredit to lead a $475m 12-year term loan facility and $40m cost overrun facility. The term loan is will pay in the 150bp over Libor range, according to bankers away from the deal. Proceeds will be used to partly finance the development of Baja’s El Boleo project in Baja California Sur, Mexico. While mining deals have been well received by the market, there have been virtually no Mexican loans in the sector in the past two years.

Gerdau’s tier of MLAs for a $2.75bn syndication is growing, with bankers saying the financing is enjoying strong interest from a number of prospective lenders. Lead banks JPMorgan, ABN AMRO and HSBC have accepted participation from Standard Chartered, Sumitomo and Banco do Brasil, in addition to the previously reported Tokyo Mitsubishi and BBVA. Tickets are $300m apiece for participation in the 3-tranche financing that includes a 5-year trade related piece at Libor plus 100bp, a 6-year trade piece at Libor plus 125bp and a 5-year working capital facility at the same spread. The deal is the first major syndication to be launched following the credit downturn, and bankers say pricing is attractive, given the quality of the credit.

Mexico’s Banco Inbursa is the first MLA to join the group of lenders to the first FARAC project, being run by ICA and Goldman Sachs Infrastructure Partners (GSIP), say executives close to the process. The bank signed up for a ticket of $300m equivalent in pesos, and is expected to be followed by up to three more banks by the close of business Wednesday. The $3.1bn 7-year acquisition facility is pushing the limits of peso-denominated lending in Mexico, forcing foreign banks to come up with innovative ways of obtaining the necessary funds to participate. Domestic banks with sufficient balance sheet are naturally leading candidates for participation. Leads on the syndication Santander, Dexia and NordLB are hopeful they will get enough MLAs to be able to reduce participants’ holds closer to $200m.

Bank of Tokyo Mitsubishi has joined BBVA as an MLA on a $2.75bn loan for Gerdau is taking out to acquire US competitor Chaparral Steel. The Brazilian steelmaker has hired JPMorgan, ABN AMRO and HSBC as joint book runners, and is looking to lure MLAs with $300m tickets to participate in the 3-tranche financing. It includes a 5-year trade related piece at Libor plus 100bp, a 6-year trade piece at Libor plus 125bp and a 5-year working capital facility at the same spread, according to people familiar with the transaction. It will go to general syndication as early as the week of September 17. Gerdau’s is the first large LatAm loan to be launched since the July-August sell-off, and the pricing on the deal reflects the new, less certain financing environment, say bankers. At BBB minus, Gerdau is rated just one notch below CVRD (BBB), but it is paying close to 40bp more on a trade-related facility that is half the size of the one taken out by the Brazilian mining concern less than a year ago. Brazilian steel is in the spotlight following rumors that CVRD would make a joint bid with BHP Billiton for fellow miner Rio Tinto. A deal, which would be the biggest in the sector’s history, would likely face both credit and regulatory hurdles. It would also propel the Brazilian firm to the top of the global commodities business.