The government of Peru has signed a contract with CAF for an 18-year loan with a 5-year grace period for up to $150m, according to a release by Peru’s Ministry of Economics and Finance. The interest on the loan will be Libor plus 2.4%. The loan will finance irrigation infrastructure needed to bring 38,500 hectares into agricultural production in the Las Pampas de Majes – Siguas region. The first phase of the project involves work relating to the Angostura dam and the Angostura-Colca bypass, as well as some repairs. The first phase will cost $207.7m, to be financed by the loan and by the regional government of Arequipa. The second phase will consist of the construction of the Lluclla-Siguas bypass which will cost $217.28m. The second phase will be financed by the concessionaire.
Category: Structured Finance
Moody’s Chops Su Casita ABS
Moody’s has downgraded a Hipotecaria Su Casita construction loan securitization to B3/Ba3.mx from B1/Baa1.mx, and withdrawn the B1 underlying rating. The move comes after the Ambac financial guarantee on the senior certificates was canceled. The downgrade reflects the credit deterioration of the portfolio, says Moody’s. The ratings action also reflects concerns about the mortgage provider’s stability as a servicer of debt, as a result of the recent downgrade of the company’s issuer rating.
Debut Mexico REIT Fails to Launch
What was to be Mexico’s first REIT has been postponed, according to bankers managing the transaction. The Fibra Uno deal brought by Grupo E, expected to raise around MXP5bn, failed to generate demand within its target MXP21-MXP23 range, according to sources familiar with the deal. They add that the book was well bid at MXP18. The 230m certificate deal would have raised MXP4.1bn at that price, assuming the maximum number of shares was sold. It started marketing last month and was targeting a February 3 sale. Mexico has been waiting years for its first REIT. Such a deal, known as a fibra locally, is possible following regulatory changes last year. Fibra Uno was to consist of 12 industrial, commercial, office, and mixed-use properties located throughout Mexico and totaling 484,000m2. The commercial properties had an average occupancy rate of around 90%, but the industrial properties’ rates were lower, notes a banker away from the deal. He also says that a fibra with more institutional backers might have received more interest, versus one backed by family investors. Grupo E consists of 60-70 owners, led by the El-Mann and Attie families. Santander was lead coordinator in Mexico, with BAML and UBS as global coordinators and Mexican bookrunners and Protego as a Mexican bookrunner. Proceeds were to have been used to fund the acquisition of 5 additional commercial and mixed-use properties totaling 189,000m2. About 50% of the deal was aimed at international investors, who were heard keenly watching it. “There is a great deal of wealth tied up in Mexican buildings and property,” says a London-based EM equities portfolio manager who had planned to participate. He notes that he was hoping the debut would inspire a string of similar deals, creating a potentially strong asset class. The suspension of Grupo E leaves the asset class with an uncertain fate. A second fibra, from Construtora Planigrupo was filed recently, targeting MXP2.75bn.
Banco Pine Closes Loan
Banco Pine closed a BRL207m securitized loan using the FIDC structure. The 4.5 year FIDC is expected to pay the DI rate plus 2.0% and will be backed by various types of credit at the mid-size lender. BTG Pactual managed the deal, rated AA+ on a national scale.
CAF Revisits Europe
CAF reappeared in the euro market Wednesday to raise EUR250m ($343m) via a reopening of its 2018 bonds. The Andean multilateral retapped the A1/A+ 4.625% coupon bond at 98.505 to yield 4.879%, or mid-swaps plus 175bp, the tight end of 180bp area guidance. Demand reached almost EUR400m, according to CAF director of financial policies and international issues Gabriel Felpeto, allowing an upsize from EUR200m. He tells LatinFinance the bank picked up leftover demand from the original deal, though 25% of the book was new investors. Participation came from 40 accounts in 13 European countries. Pricing was about the equivalent of dollar mid-swaps plus 195bp-200bp, according to bankers on the deal. This represents some savings to its dollar curve, with CAF’s 2019 trading at the equivalent of dollar mid-swaps plus about 215bp, they add. Wednesday’s price also compares favorably to the level CAF got in November, when it originally priced the bond at euro mid-swaps plus 200bp, or dollar mid-swaps plus 220bp equivalent level, Felpeto says. BNP and HSBC managed. CAF raised EUR400m from the original sale in November, also through BNP and HSBC, its first in Europe for 4 years.
CAF Signs ADB Pact
CAF said Thursday it has signed an MoU with the ADB to strengthen LatAm-Asia ties. CAF president Enrique Garcia says the two development banks are exchanging ideas and experience in infrastructure, social development and finance. “We need to drive the dialogue between emerging economies, as much as business and investment,” he adds.
Mexico ABS Seen Picking Up
Mexico’s securitization market is set to have a good year, as the Mexican economy stabilizes, according to S&P. However, any potential financial uncertainty could dissuade investment in new issuance. “Overall 2011’s structured debt issuance will be similar to 2010,” it says. Issuance in 2010 was $8.7bn equivalent. Mexican structured finance issuance in 2010 was made up of 34% RMBS, 22% ABS, 36% future flows, 4% synthetics and 4% partial credit guarantees. The issuance and performance of ABS is expected to remain strong. “For auto loans, trade receivables, and consumer loan transactions, we don’t anticipate any ratings actions in the short term (6 to 12 months),” says S&P. Issuance activity of synthetics and PCGs is expected to be similar in 2011 compared to 2010, with transactions adding up to $166.8m. S&P expects Infonavit and Fovissste to continue to issue large amounts of RMBS. In 2010, 9 transactions of loans originated exclusively by Fovissste and Infonavit were rated, with the total number of RMBS declining 24% since 2009. The construction sector is expected to continue to face challenges, as in 2009 and 2010, and as a result so are construction loan securitizations. During 2010 S&P withdrew 11 ratings, and downgraded 6 because they failed to pay back principal on time. Securitization of new assets, such as guaranteed consumer loans and microloans are also expected this year. The agency adds that it anticipates new participants in the market and fewer negative ratings actions. In total, considering all types of issuance, S&P downgraded 45 series and affirmed 35 ratings during 2010.
Bladex to Swap UF Bonds to Dollars
Panama-based trade finance bank Bladex intends to swap the UF funds into dollars, treasury vice president Gregory Testerman tells LatinFinance. The bank has been expected to issue up to UF2.5m ($109m) in bonds in Chile. Testerman says that issuance could take place any day given strong investor demand. However, the bank is waiting for the best conditions for the swap to finally issue the bonds. Earlier this month, the Chilean central bank announced it would intervene in the market to control the appreciation of the CLP. The move caused the cost of swapping UF to USD to rise about 50bp, according to Milciades Denis, Bladex’s head of treasury. According to Denis, Bladex did not issue last year because the bank already had the necessary funds to cover mid-term financing operations. Conditions have improved since the central bank’s intervention, with the cost coming down by about 15bp, he says. Denis declines to disclose the total cost he expects for the issue, which include a 3-year and 5-year tranche. Issuing in UF is a better option for the bank than issuing in CLP, because UF enjoys more investor demand and provides access to longer tenors according to Denis. He adds that the cost of issuing directly in dollars is around 15bp-20bp higher than issuing in UF and then swapping to dollars. BBVA is leading the sale, which should be the first huaso of the year. Denis also notes that Bladex has registered a bond issue in Peru, but that there are no plans to issue there yet, as pricing is not as attractive as in Chile. A Peru issue would be run by Interbank.
PDG Readies CRI
Brazil’s PDG Realty is preparing a BRL200m RMBS in the domestic market using the Certificados Recebiveis Imobilarios (CRI) structure, it says. The 8-year deal is set to be divided into two tranches, the first paying 107% of the DI rate, and the other paying the TR inflation rate plus 10.15%. The size of each tranche is still to be defined. The issue size could be increased to BRL300m. The transaction includes 667 mortgages. Itau is managing the sale. The deal is expected to close by the end of February, according to a PDG official.
Energisa Perp Struggles
An NC5 perpetual bond Energisa priced yesterday struggled in the aftermarket. The $200m 9.5% coupon priced at par and was spotted at 98.5 – 99 at close. A banker on the deal said the book closed north of $300m. Investors expressed reservations about jumping in on the deal for the Brazilian electric distribution holdco due to the bond’s hybrid structure. The structure allows coupons to be deferred at any time in exchange for a 100bp step-up and the halting of dividend payments on equity. Though this hybrid structure is usually seen in a subordinated deal, this bond is senior. BAML, MS and Santander managed the issue, which was rated Ba2/BB minus.