Brazil’s Empresa Brasileira de Terminais Portuarios (Embraport) has raised approximately $1bn in debt and equity financing to carry out the construction, operation and maintenance of a new container and liquids terminal in the Santos Port. Financing consists of an $430m IBD A/B loan, a 15-year BRL633m ($341m) loan from development bank BNDES as well as $255m in equity from sponsors Odebrecht Transport, Dubai Port World, and Coimex. The BNDES loan pays TJLP+350bp and is lent through the Caixa Economica Federal. The IDB A loan has a $100m size with a 15-year tenor, while the B loan has a $330m size with a 12-year tenor. The margin on the B loan is L+300bp during construction, with a step-up following completion, according to a source familiar with the matter, who declines to comment on the A loan pricing. WestLB, Santander, Caixa Geral, and HSBC participated in the B loan.
Category: Project & Infrastructure Finance
Grupo Mexico Considers Funding Options
Grupo Mexico may seek up to $2.4bn or more in funding depending on how various projects evolve in its infrastructure and mining divisions, Daniel Muniz Quintanilla, the company’s CFO, tells LatinFinance. The company is looking to raise $500m in the loan market as it starts building the La Caridad power project in Sonora State, Mexico. The borrower is currently receiving proposals from banks to finance the project, in which Grupo Mexico will act as sponsor and offtaker. This comes as the issuer awaits approval to take control of airport operator Grupo Aeroportuario del Pacifico (GAP), which could require up to $1.5bn in funding depending on how many holders tender their shares. Grupo Mexico currently holds a 25% stake in GAP. Financing could take the form of a loan and takeout, but the company hasn’t made a clear decision yet, adds Muniz. The borrower may also require financing after winning the toll road concession to build and operate the Salamanca-Leon toll road in Mexico. With development bank Banobras offering 30-year funding, the borrower is leaning toward this option, he says. Local financial institutions such as Banorte and Inbursa are also offering financing. About $150m will take the form of equity, with the rest coming from debt. Grupo Mexico could also move ahead shortly with its Tia Maria copper project in Peru now that the government has clarified the new tax regime for mining companies in that country. The greenfield project will require $1bn in investments, with $400m of that amount being financed through equity, he says. On a consolidated basis, the company has about $2.5bn.
CentAm Needs $13bn in Energy Project Financing
Central America will need an estimated $13bn to finance 7,000MW of generation capacity by 2015, according to Hector Rodriguez, coordinator of ARECA, a renewable energy project supported by development bank Cabei. As a result, many countries in the region are slashing taxes and import fees relating to renewable energy projects. The region is looking to satisfy an average annual increase in electricity demand of 6% over the last quarter century. Honduras, for example, passed a law that eliminated all taxes and tariffs on the purchase of materials and services for renewable energy projects, and provides a financial incentive worth 10% of the base price of electricity. “That was definitely part of the motivation in creating our wind project,” Jay Gallegos, CEO of MesoAmerica Energy, tells LatinFinance. The company’s wind energy project, Energia Eolica de Honduras, began operations in June and will generate 102MW. The project cost $260m and was financed primarily by Globeleq Generation. The country plans to build 21 new energy projects, including five large hydroelectric projects with investment price tags ranging from $110m-$700m. Panama, meanwhile, plans to add 22 renewable energy projects over the next four years, adding 1,061MW to its system at a cost of $4.37bn. Italy-based ENEL, Europe’s largest energy provider, has projects in five Central American nations and, according to Francesco Starace, CEO of ENEL Green Power, plans to expand further.
Tilting at Windmills
Mexico’s wind energy market is potentially lucrative. But a lack of government commitment and insufficient transmission capacity could stall its development.
Cifi Visits Investors
Corporacion Interamericana para el Financiamiento de Infraestructura, (Cifi) is meeting fixed income investors this week. The Panama-incorporated, Washington-based lender is visiting US, Europe and LatAm buyers on a “non-deal” basis this week and next week through Tuesday, according to bankers managing the process. Bank of America Merrill Lynch and Standard Chartered are managing. The bank, which lends to infrastructure projects in the region, has yet to issue a cross-border bond, according to Dealogic. Cifi is owned by a group of multilateral and private banks, including HSBC, Caja Madrid, La Caixa, Itau, IFC, Caribbean Development Bank and Cabei.
Jamaica Highway Gets Financing
Jamaica-based toll road operator Transjamaican Highway Limited (THL) has obtained a $285m 18-year financing package from a syndicate made up of the European Investment Bank (EIB), the IDB, the IFC, and Proparco. Of the total amount, the EIB is putting up 27%, the IDB 27%, the IFC 27% and Proparco 19%, according to US-based Astris Finance. Astris acted as exclusive financial advisor to THL. Proceeds will be used to refinance a bond issued in 2001 to finance the first phase of construction of the Highway 2000 toll road and to finance a 10-km expansion of the road.
Project Finance Loans Miss Expectations
Structured finance bankers say that while they had expected infrastructure projects to require project finance loans this year, no new loans are close to being launched. The dearth of proposals has bankers worried the project finance market could be heading into a dry period in the next few months. “The last 2 months provide a very gloomy forecast as there is some pitching going on, but nothing else in the project finance space,” says one syndicated loans banker, who adds that even activity in the corporate loans space is spotty. Vale has appointed bookrunners for a $3bn syndicated loan, while America Movil is looking at proposals for a $4bn loan and Gerdau has put out an RFP for a $1bn loan. “A lot of corporates are well financed, so there are not many deals, and any deals that do come to the market will be able to price tightly as there is not much volume and banks are hungry to use their balance sheet,” says one head of syndicated loans. Market participants add that while some banks will look to lead deals, despite tight pricing, it will be very difficult for banks to participate at a retail level, particularly for European banks seeing higher costs as a result of the sovereign debt crisis. The last project finance loan, a $250m A/B loan from the IFC to fund the 168MW Cheves hydropower plant in Peru, came in December.
Ecopetrol Picks Pipe Partners
Ecopetrol has picked equity partners to join a consortium to build the $4.2bn Oleoducto Bicentenario oil pipeline, it says. Ecopetrol will contribute 55% of the equity portion of the project, with the remaining 45% ($139.5m) equity participation coming from the partners. Pacific Rubiales (32.9%) and Petrominerales (9.7%) are taking the largest positions. Hocol, Rancho Hermoso-Canacol, Grupo C&C and Vetra each took stakes of less than 1%. The partners should also contribute $700m to fund construction of the project’s first phase, Ecopetrol says. The project will also require an undetermined debt component, of which Ecopetrol has said it would seek a portion in Colombia’s domestic markets.
Nicaragua Wind Project Signs Loan
The Amayo II wind project has closed on a $45m 15-year non-recourse project financing from FMO and Cabei. The facility consists of a $42m senior loan and a $3m mezzanine loan. Senior loan participants include Cabei, FMO, EKF and BIO. The borrower is Consorcio Eolico Amayo (Fase II), a subsidiary of AEI, Centrans Energy Services and Energia Eolica de Nicaragua. The wind project consists of 11 wind turbines capable of producing 23.1 MW of electricity. Output is fully contracted under long-term, 15-year PPAs with local power distribution companies Dissur and Disnorte.