Category: Structured Finance

The IDB says it has approved a $170m loan to Argentina to promote technological innovation in agriculture. The Argentine government will provide an additional $43m in local counterpart funds for the program. The IDB loan is for a 25-year term, with a 5-year grace period and a variable interest rate based on Libor.

The IDB has approved loans for Brazilian cities Rio de Janeiro, which will get $112m, and Pernambuco, which will get $75m. The loans will support the National Tourism Development Program’s efforts to increase employment, revenue, and foreign exchange generated by the sector. The loan for Rio de Janeiro is for a 25 year term, with a 4-year grace period and a variable interest rate based on Libor. The state will provide an additional $75m in local counterpart funding. The credit for Pernambuco is also for a 25 year term, with a 5-year grace period, a Libor-based interest rate and $50m in local counterpart funds.

The IDB has approved a $45m loan for Barbados to promote renewable energy use. The program is expected to generate a net benefit of $284m in fuel and electricity cost savings over the next 20 years, the bank says. The loan is for a 20-year term, with a 5-year grace period, and carries a variable interest rate based on Libor. It is expected to be followed by a second loan of similar characteristics.

The IDB has approved a $15m loan for Banco Promerica de Costa Rica to help the bank expand its long-term mortgage operations and loans for environmentally sustainable projects. “Through mortgage financing, the project responds to an increased demand to channel resources to a population with traditionally limited access to credit for housing.” says Daniela Carrera Marquis, head of the IDB’s financial markets division. Banco Promerica will improve opportunities for the middle-income segment to buy residential property, thus entering a new market and downscaling from its more traditional operations, oriented towards higher income customers. Promerica is part of a regional network that includes financial institutions in Guatemala, Honduras, El Salvador, Nicaragua, Panama, Dominican Republic and Ecuador.

The IDB has approved a $162.5m loan for the Brazilian state of Sao Paulo to finance conservation and restoration of the 315,000-hectare Serra do Mar State Park, the Jureia-Itatins Ecological Station and marine and coastal conservation units. The 25-year loan, denominated in USD, has 4-year grace and disbursement periods and a Libor-based interest rate. The IDB loan will cover 34.5% of the cost of the project while the state will cover the remainder, the bank says.

The CAF has approved 2 loans for Venezuela’s Zulia state, one for $126m and the other for $261m, to be used to strengthen the country’s electricity infrastructure. The $126m loan will be used specifically to finance the construction of 2 substations and the expansion of another substation. It will also finance the modernization of transmission lines for these substations. The $261m facility will finance construction of Termozulia III. The financing is part of a $600m shelf approved by CAF in 2009.

Mexican silver miner Penoles and Central American development bank Cabei are expected to price bond transactions today in Mexico’s domestic market. Penoles is planning to issue $600m via BBVA, Santander and HSBC. Looking for liabilities that match cashflows, the company pulled an up to MXP7bn issue in June because it failed to find an acceptable FX derivative structure to swap the issue back into dollars. Proceeds from the deal, rated Aa1 on a national scale, will go towards refinancing debt and financing investment. Penoles is a leading producer of refined silver, claiming an approximately 11% market share globally, and also lead and zinc. Cabei is expected to issue between MXP500m-MXP750m via Banamex, says a lead banker. The triple A bonds will have a maturity of 10 years and pay a spread over TIIE. Cabei, seeking to grow its lending portfolio to support infrastructure projects, last came to the Mexican domestic market in 2008. It has 9 outstanding bonds in the market, worth a total $400m, with maturities of 2-12 years. Cabei has done 50%-60% of its funding for 2010, having pre-funded $500m in 2009.