Category: Structured Finance

The IDB has approved a $200m loan for Panama to be used to reform the country’s tax administration and improve public spending management. The loan is for a 20-year term, with a 5-year grace period and an interest rate based on Libor. Separately, the IDB approved a $70m loan to Panama to rehabilitate roads. About 80% of roads in Panama are in poor conditions due to lack of preservation, depriving the country’s most isolated communities of access to urban centers, the bank says. The loan has an amortization period of 25 years, a grace period of 5 years and interest rate based on Libor.

The IDB has approved 2 loans worth $134.5m for Honduras to be used to expand Puerto Cortes, CentAm’s largest port. One of the loans is for $94m and has a 30-year fixed-rate loan with a 6-year grace period. The other one is for $40.50m, with maturity and grace period of 40 years, and a 0.25% percent interest rate. Both loans, which will finance about 60% of the cost of the project, will be disbursed in 4 years.

The IDB has approved a $58m loan for Ecuador’s state-owned oil company Petroecuador to improve fuel supply to the domestic market and modernize pumping stations. The loan is for a 25-year term, with a 3-year grace period and a Libor-based interest rate.

The IDB has approved a $64.7m loan to Ecuador so the country can expand its electricity transmission capacity and increase efficiency. The loan is for 25 years, with a 4-year grace period and an interest rate based on Libor.

Brazil’s Banco Sofisa has closed a $140m A/B loan via the IDB and Banco Itau Europa. The $25m, 5-year A loan came from the IDB. The B loan consists of 4 tranches. Two of the tranches are for 2 and 3 year tenors for a combined $90m. Another 2 tranches are valued at EUR18.6m and also have tenors of 2 and 3 years. The spread on the B loan was heard in the high 200bp over Libor area, according to a banker with knowledge of the transaction. Banco do Brasil Vienna, HSBC and Standard Bank were bookrunners. Sofisa specializes in lending to small firms in less developed regions. The transaction was almost 2x oversubscribed according to Ricardo Pereira, Banco Sofisa’s CFO. ING was an MLA, while Barclays, Commerzbank, Israel Discount Bank and Santander were lead arrangers. AKA Ausfuhrkredit-Gesellschaft, BAC Florida Bank, Banco Security, Oberbank, Standard Chartered and UBS were arrangers. “There were several Brazilian deals in the market before this, but the deal still garnered a lot of interest, and attracted new names,” Jozef Henriquez, head of IDB syndications tells Latin Finance. Sofisa says it expects to use the loan to expand its loan portfolio to small firms and double its customer base by 2015. It expects to increase total loans from $1bn to more than $2bn.

The IDB has approved a $42.5m local for Nicaragua in 2 loans to strengthen tax collection and reduce poverty. The IDB financing includes a loan of $21.25m with a 30-year maturity, with a grace period of 5.5 years at a fixed interest rate. The remaining $21.25m will consist of another loan with a term and grace period of 40 years and an annual interest rate of 0.25%. The IDB also approved a $10m loan for Paraguay to help it develop its tourism industry. The loan is for a 25-year period, with grace and disbursement period of 5 years and a Libor-based interest rate.

With European volatility subsiding on news of a likely Irish bailout, CAF was able to raise a EUR400m bond Monday, upsizing from a planned EUR300m. The Venezuela-based multilateral lender drew about EUR900m in orders, according to a banker on the deal, after meeting the buyside last week. BNP and HSBC managed the sale. The A1/A+ 2018 priced at 99.603 with a 4.625% coupon, to yield 4.694%, or mid-swaps plus 200.0bp. “One of the objectives was to have the cost at most at USD levels,” Gabriel Felpeto, CAF’s director of financial policies and international issues, tells LatinFinance. Had CAF done a 2018 dollar bond, the issuer would have looked for a USD Libor mid-swaps plus about 220bp, explains a banker on the deal, which would be equivalent to euro mid-swaps plus 200bp or slightly less. CAF also wanted to diversify its funding and return to a market it had not issued in since 2006, Felpeto says. “There had been troubling news coming out of Europe, though many investors were more willing to diversify out of Europe and into LatAm,” he adds. “They priced tight – only about 30bp wide of Spain, though maybe that’s not surprising anymore,” says a UK-based EM investor considering the deal, referring to the troubled Aa1 sovereign’s trading at around mid swaps plus 168bp-170bp. The investor does not see much contagion risk going forward for LatAm issuers on bad news from Europe, though with the US Thanksgiving holiday and the end of the year approaching, new bond issuance may be limited for the rest of 2010. The more than 80 accounts participating in the deal were mainly high-grade portfolio managers, Felpeto says. About 33% came from France, 20% from each of the UK and BeNeLux, and 10% from Germany, with the remainder from other countries, according to a banker on the deal. CAF priced CHF250m in 2.625% 2015 bonds last month in the Swiss market at a 2.650% yield. Its last public euro-denominated deal was a EUR300m 2006 offer, though it raised EUR100m in 2015 floating-rate bon

The IDB has approved a $90m loan for Ecuador which will be used to improve agricultural productivity and record keeping. The loan has a 25-year term, 4-year grace and disbursement periods and an interest rate pegged to Libor. Local counterpart funds total $38m.

CAF has delayed issuance of its euro-denominated bond with no indication of when it may come to market. Investors said volatile trading on news of a possible Ireland bail-out is affecting several issuers this week. CAF began investor meetings in Europe Monday. Investors say there is no official news on the bond, though they were expecting a size similar to or slightly larger than its October Swiss franc sale ($260m equivalent), at perhaps at a 5-7-year maturity. Bankers on the deal say a transaction is still likely. “They price tighter than 2 years ago, but it is a high quality credit that shouldn’t have a big problem issuing,” says a Switzerland-based investor. BNP and HSBC managed the investor meetings. CAF priced CHF250m in 2.625% 2015 bonds last month in the Swiss market at a 2.650% yield. It sold EUR100m in 2015 floating-rate bonds in February through Goldman Sachs, according to Dealogic, its first euro-denominated deal since a EUR300m 2006 offer. CAF is rated A1/A+.