Mexican microlender Banco Compartamos is set to enter Peru, after agreeing to acquire 82.7% of Financiera Creditos Arequipa for $63m. Financiera Crear, as the Peruvian entity is known, became a credit entity in 1998 and has a loan portfolio of $130m. Compartamos says Peru reported a 25% increase in loans to micro-businesses in recent years, and that there is a market potential of 1.2m women. About 98% of Compartamos’ clients are women. Compartamos last year transferred its Mexico listing to its financial holdco to facilitate its first international acquisitions. CFO Patricio Diez de Bonilla told LatinFinance last week that the microlender has eyes on both Central and South America and that Peru is among the most developed and sophisticated microfinance markets. Compartamos will pay for the deal using funds at hand, and the transaction is expected to close in the second quarter. Peruvian boutique LXG advised Compartamos, according to an investor relations official.
Category: Structured Finance
Gran Tierra Considers Colombia Listing
Gran Tierra is considering listing on the Colombian stock exchange, COO Shane O’Leary tells LatinFinance. Speaking on the sidelines of the IDB conference, O’Leary says listing in a local exchange would allow the Calgary-based oil and mining company to tap a wider pool of capital and more diversified investor base, such as Colombian pension funds. “We see more Canadian companies [eventually] listing in Colombia,” he says. Other Canadian companies that have listed in the Colombian exchange recently include Canacol Energy and Pacific Rubiales. Arthur Korpach, head of oil & gas at Canadian investment bank CIBC, says there are also opportunities for LatAm companies to list on the TSX. “There are 283 LatAm companies listed on the Canadian exchanges,” he notes. “In the past year or so, CAD3.0bn was raised [in Canada]
to finance 1,100 mining projects in LatAm. In the past 18 months, 21 publicly traded companies raised CAD1.6bn to invest in Colombia alone,” he adds.
Compartamos Studies Ex-Mexico Expansion
Fresh off an equity reorganization designed to facilitate international expansion, Mexico’s Banco Compartamos is looking at various options outside Mexico. The microlender, which last year transferred its Mexico listing to its financial holdco, is considering both Central and South America, CFO Patricio Diez de Bonilla tells LatinFinance. “Growing organically in Central America would be very simple,” he says, though not necessarily a fast process. The business model that serves it well in southern Mexico would be easily applicable to a market such as Guatemala, for example, since both are predominantly rural and less affluent than other markets. An acquisition would be more likely in Brazil, Colombia or Peru, where microfinance conditions are different. Peru is very mature and quite competitive, Diez de Bonilla says, while Brazil is “just starting.” As for financing, he explains Compartamos plans to be a regular domestic debt issuer, and plans to match last years MXP1bn sale with another in the third quarter this year, he says.
HITO Hits the Road
Mexico’s Hipotecaria Total is on a roadshow this week for a MXP2bn-MXP3bn RMBS deal via HSBC, says a banker on it. The mortgage provider’s roadshow began yesterday and will close today, only visiting investors in Mexico City. HITO is looking to issue the week of April 11, adds the banker. The 2027 bonds have an average life of 7 years and proceeds will be used to increase its lending portfolio. The deal is rated AAA on a national scale.
Santander Argentina to Issue Shares
Shareholders of Santander Rio have approved of the issuance of 145m new shares, the Argentine unit of the Spanish bank says. It does not give details about the nature of the transaction, though the market has been expecting the bank to hold a public follow-on to increase its free float. The bank says it would price the class B shares in the range of ARP10 to ARP26, indicating an ARP1.45bn-ARP3.77bn ($359m-$934m) total size. The shares closed at ARP14.00 Thursday, which would indicate an ARP2.00bn deal. The bank does not give an indication of the timing of the transaction.
CAF Provides Panama Construction Loan
CAF has approved a $400m construction loan to the Republic of Panama to build the 1 line for its Metro system. The total cost of the project will come to $1.8bn, with the CAF loan representing 22% of the total investment. CAF has approved $1.3bn in operations for Panama in the last 5 years.
Remittances to LatAm, Caribbean Increasing
Remittances to LatAm and the Caribbean are likely to rise this year after stabilizing in 2010, according to the IDB’s Multilateral Investment Fund. Measured in USD, money transfers made by LatAm and Caribbean migrants to their countries of origin reached $58.9bn in 2010, virtually unchanged from $58.8bn in 2009, when remittances saw a 15% drop due to the effects of the global economic crisis, the MIF says. Although remittances stabilized in 2010, the MIF says they increased in some sub-regions. Transfers to CentAm jumped 3.1% while those to Haiti increased 20%, largely due to the humanitarian crisis caused by the earthquake. “Remittances to LatAm and the Caribbean are likely to continue rising in volume in 2011, although still below the double-digit rates they attained in years prior to the global crisis,” the MIF says, adding that the pace of growth will depend principally on how strongly the job markets in source countries such as the US and Spain recover.
Taboada Raises Wastewater ABS
The Taboada wastewater treatment plant in Lima has closed a PES942m ($340m) ABS. The three-tranche deal was placed mainly with local market investors, bankers say, but also saw some international participation. The bonds priced at par and pay the VAC – an inflation measure linked to the IPC inflation index – plus 5.965%. This is just inside of inflation plus 6.0% area indications investors had received previously. It comes in line with the inflation plus 5.2% yield seen last year on a similar PES320m transaction for the Huascacocha water treatment facility, once increases in yield in Peru’s government bonds since then are taken into account, according to investors. The BBB rated transaction is divided into a PES572m 2029 tranche, a PES220m 2033 tranche and a PES150m 2033 tranche. Despite the different maturities, the yield is the same for each of the three tranches, the banker says, as they were marketed to investors with different risk profiles. The amounts differ slightly from the PES923m total deal that had been estimated in presale ratings reports. To help fund construction of the plant by Spain’s ACS, Taboada will sell bonds backed by future revenues from its contract with Peru’s state-owned water utility company Sedapal, according to a Fitch report. The proceeds of the issuance will be used to purchase retribucion por inversion (RPI) payments from Taboada, for the funding of reserve accounts, and for transaction expenses, Fitch explains. The RPIs are denominated in PES and are periodically adjusted for inflation. Taboada will build the plant and receive Certificados de Avance de Obras (CAOs) from Sedapal as certain construction milestones are reached. The CAOs originate the RPI payments, and the issuance of an individual CAO gives the owner the right to receive 80 equal consecutive quarterly fixed payments (RPICAOs) in proportion to the overall work completed. The RPICAOs will then be sold to the Taboada Finance Limited special purpose vehicle. The RPICAO paym
IDB to Provide $500m for Natural Disasters
The IDB is working with 13 countries in LatAm and the Caribbean to improve disaster risk management and is expected to provide over $500m in financing in 2011 to help meet natural disaster needs. The IDB has already approved a $100m loan for the Dominican Republic under its contingent credit facility. It will consider further contingent loans for Peru, Ecuador, Costa Rica, Panama and Honduras, totaling $500 million. The IDB is also expected to provide a $24 million loan to structure and launch an Insurance Facility for catastrophic natural disaster emergencies for the Dominican Republic. The insurance facility will provide the government with 5-year $100 million coverage for earthquakes and hurricanes of catastrophic magnitude.
Taboada ABS Set to Close
The Taboada wastewater treatment plant in Lima is expected to close a PES923m ($334m) ABS as soon as today, according to a banker on the deal. The issuer has set a yield of the IPC inflation index plus 5.965%, and will look to close this week. This is in line with 6.0% area indications investors had received earlier. The transaction is divided into a PES448m 2026 tranche, a PES375m 2033 tranche and a PES100m 2033 tranche, according to Fitch, which rates the transaction BBB on an international scale. Despite the different maturities, the yield is the same for each of the three tranches, the banker says. To help fund construction of the plant by Spain’s ACS, it will sell bonds backed by future revenues from its contract with Peru’s state-owned water utility company Sedapal. The proceeds of the issuance will be used to purchase retribucion por inversion (RPI) payments from Taboada, for the funding of reserve accounts, and for transaction expenses, Fitch explains. The RPIs are denominated in PES and are periodically adjusted for inflation. Taboada will build the plant and receive Certificados de Avance de Obras (CAOs) from Sedapal as certain construction milestones are reached. The CAOs originate the RPI payments, and the issuance of an individual CAO gives the owner the right to receive 80 equal consecutive quarterly fixed payments (RPICAOs) in proportion to the overall work completed. The RPICAOs will then be sold to the Taboada Finance Limited special purpose vehicle. The RPICAO payments are guaranteed by Peru’s government. The first 2 tranches will be funded at closing, while the final tranche may be drawn only after project completion. Construction is expected to be completed in 3 phases, finishing July 2013. BNP Paribas is managing the sale.