Category: Peru

Mibanco, the Peruvian microfinance bank, raised a greater than anticipated $40m from a broadly syndicated B loan, which IFC officials claim is the first such facility for a LatAm microfinance institution. The deal is part of a 3-year transaction with a 1-year grace period that pays Libor plus 150bp with an up-front fee of 60bp. The loan, whose proceeds will be used to expand the bank’s microlending capabilities, was originally launched at $30m. It was designed to broaden the bank’s relationships with lenders. Lead arrangers with $5m tickets included HSBC, Bancolombia, Natixis, Rabobank and State Bank of India. Co-arrangers with $3m tickets included Republic Bank, Israel Discount Bank and WGZ Bank. Microfinance-focused hedge fund Minlam Asset Management joined as a participant with a $1.5m ticket. Wachovia and the IFC had the books on the deal, a follow on from a $29m A loan Mibanco took out with the IFC in June 2006

Citi has upgraded Peru to overweight from neutral in its regional portfolio based on solid macro fundamentals, with GDP growth forecast to hit 7.9% this year. “The fiscal and current account surpluses for 2007 are forecast at comfortable levels of 3% and 1.8% of GDP respectively,” says Citi. It adds that while inflation is rising – in line with other countries in the region – it remains under control at 3.4% in 2007, held down by some recent tightening of monetary policy. “What makes the market look attractive at present is short-term timing,” says the shop. It adds that MSCI Peru is just 38% above its August 16 close, versus Brazil at 67% and says Peru’s ROE, at 37.6%, is the highest in EM. “Peru has seen a massive improvement in its average ROE from 10.5% in 2003,” says Citi. It adds Peruvian gold miner Buenaventura to the focus list alongside its preferred domestic play, Credicorp. Its play on Peru equity coincides with a bullish prediction for gold to reach $850-1,000. Citi also raised its mid-2008 target for the IGBVL index to 25,000.

The syndication of a $30m B-loan for Mibanco, a Peruvian microfinance institution, is heading to the finish line, with a number of commitments for the relatively small tickets it is offering. The 3-year amortizer has a 1-year grace period, giving it a 2-year average life. It pays 150m over Libor and participants can expect fees of 60bp for a $5m ticket and 50bp for a $3m ticket. The IFC, which has joint books on the B-loan with Wachovia, extended a $29m bilateral A loan in June of 2006 to Mibanco. One of the main purposes of the deal, apparently the first international syndication for a microfinance institution, is to give it access to new banking relationships.

Peru’s BBVA Continental is taking its $250m IFC A/B facility to general syndication, say bankers close to the process. The bank obtained a $100m A loan and is syndicating the $150m B portion, which is made up of a $100m 2-year facility at Libor plus 40bp and a $50m 5-year tranche at Libor plus 95bp. Exact tranche sizes for the BBB minus credit are still being determined. Standard Chartered and the IFC are leading the syndication. BayernLB, Chile’s BCI, Sumitomo Mitsui and Wachovia have all signed on as MLAs with $20m tickets. On October 26, the deal was launched to retail and the entire process is likely to close by November 16.

The Peruvian government is hoping to push through a new law to make public-private partnerships a more viable piece of the government’s effort to stimulate infrastructure investment. While details of the law are still unclear, the goal is to push it through Congress by the end of the year, José Arista Arbildo, Peru’s vice minister of finance, tells LatinFinance. Between now and the end of 2008, Peru will look to have $3bn worth of investment in infrastructure projects, including ports, airports and roads.

Peru is just a few months away from launching its Repo market, José Arista Arbildo, vice minister of finance, tells LatinFinance. “We hope that by the end of the year, that market will be ready to go,” says Arista, who adds that the exact timing for a first trade is not etched in stone yet. The program will begin with providing repo for the sovereign’s most liquid local currency bonds, including the 2037, 2026, 2020, 2017, 2015, 2011 and 2008 maturities. The immediate goal is to give long-dated instruments liquidity and stimulate secondary market trading, says the minister. Currently, the government is working with other market participants, including the Central Bank, to standardize the repo contract and get the platform ready to start trading.

Peru is just a few months away from launching its Repo market, José Arista Arbildo, vice minister of finance, tells LatinFinance. “We hope that by the end of the year, that market will be ready to go,” says Arista, who adds that the exact timing for a first trade is not etched in stone yet. The program will begin with providing repo for the sovereign’s most liquid local currency bonds, including the 2037, 2026, 2020, 2017, 2015, 2011 and 2008 maturities. The immediate goal is to give long-dated instruments liquidity and stimulate secondary market trading, says the minister. Currently, the government is working with other market participants, including the Central Bank, to standardize the repo contract and get the platform ready to start trading.