The IDB has approved a $200m loan to El Salvador to finance a program aimed at improving public finances. The loan is structured in 2 tranches, each representing 50% of the total financing, subject to verification that steps have been taken to increase revenues, improve administration, boost the efficiency and equity of subsidies, and encourage transparency in fiscal management. It will be disbursed in 24 months and has an amortization period of 20 years, a 5-year grace period and an interest rate based on Libor.
Category: Structured Finance
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Fovissste Preps RMBS
Mexico’s Fovissste has filed for a MXP4.5bn UDI-denominated RMBS issuance. The government-owned lender has targeted March 24 to issue the 2039 fixed-rate bonds. Proceeds from the deal, its first of the year, will go to making new loans. Banorte, Ixe and Bank of America-Merrill Lynch are managing the sale, rated AAA on a national scale, with Goldman Sachs joining the trio as structuring agent. The lender paid 5.4% on a similar $5bn deal last year. Fovissste and fellow state-backed lender Infonavit propped up Mexico’s new issue RMBS market last year, and are expected to do so again in 2010. Infonavit’s first deal of the year, at MXP5.69bn, is set for March 10.
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Haiti Reconstruction to Cost up to $14bn
An IDB study calculates that it will cost between $8bn and $14bn to rebuild Haiti’s infrastructure, making the earthquake that hit the country in January proportionately the most destructive natural disaster of modern times. IDB economists Andrew Powell, Eduardo Cavallo and Oscar Becerra calculate a base estimate of $8.1bn for a 250,000 dead-or-missing toll, but they estimate this figure is likely to be at the low end. The team concludes that an estimate of $13.9bn is within the statistical margin of error. As of February 11, the Haitian government had reported 230,000 dead.
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Brazil Banks Forge ATM Alliance
Banco Santander, Banco do Brasil and Bradesco have agreed to consolidate their outdoor ATM machine networks. Together they include about 11,000 machines located in airports, gas stations, supermarkets, shopping malls, drugstores and bus terminals. Statements from the banks indicate that the move will increase the networks’ cost efficiency and provide better access for clients. A new brand will be created for the merged ATM networks. The banks expect to conclude the deal in 5 months.
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Ecuador Gets CAF Credit
Multilateral CAF has approved $200m in loans to Ecuador. Out of the total sum, $100m will be a loan to improve the country’s drinking water services and sewage system. The other $100m will be a revolving credit line to Ecuador’s development bank, Corporacion Financiera Nacional, that will help it assist the productive sector.
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Infonavit Preps First Mexico RMBS of Year
Mexican government mortgage lender Infonavit is planning a sale of MXP5.69bn of its Cedevis RMBS, in what should be the first local RMBS sale of the year. The 2036 bonds will be denominated in UDIs and split into MXP2.85bn tranches amortizing one after the other and paying a fixed interest rate. Infonavit is targeting March 10 for the sale, according to regulatory documents. Banamex and HSBC are managing the transaction, rated AAA on a national scale. Infoanvit and fellow government lender Fovissste have propped up the Mexican RMBS market since the crisis all but wiped out issuance from private lenders. Infonavit priced MXP2.53bn in UDI-denominated RMBS in November at 5.4%, also through Banamex and HSBC.
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DomRep, Vene Get IDB Loans
The IDB has approved a $100m loan for the Dominican Republic to help build 34 schools, refurbish more than 200 schools and stock classroom libraries. The loan is for a 25-year term, including a 5-year grace period, at a Libor-based interest rate. The government of the Dominican Republic will provide $10m in local counterpart funds. Separately, the IDB has approved a $50m loan for Venezuela to improve drinking water service quality. The government will provide $25m in local counterpart funds, taking total funding for the program to $75m. The IDB facility will have a 25-year term, with a 5-year grace period, at a variable interest rate based on Libor.
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ACCION Mines Brazil’s North
Global microfinance organization ACCION International is expanding in Brazil after president Lula approved its application to establish a unit in the state of Amazonas. The IDB’s Multilateral Investment Fund will take an 18.1% stake in ACCION Microfinancas. Private investor Luiz Felipe D’Avila and other private investors will own 8.5%, and ACCION will hold 73.4% of the organization. ACCION will start operations in Manaus, the largest city in Amazonas, with plans to extend to cities throughout Brazil’s northern region. The area is home to an estimated 1.9m micro entrepreneurs, just 8%-10% of who have received any kind of loan from a bank or microfinance organization, says ACCION. It issued its first microloan in Brazil in 1973. Partner microfinance institutions operate in 23 countries in LatAm, Asia, Africa and the US. In the last decade, ACCION partners have disbursed more than 28.5m loans totaling $23.4bn.
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Scotia Peru Plans DPR
Scotiabank Peru is preparing a $250m diversified payment rights (DPR) securitization, which should come by mid-February. The 7.00-year amortizing deal with a 4.83-year average life will be floating rate, according to a banker managing it. The transaction is backed by rights to electronic payment orders intended for payment to third party beneficiaries via Scotia Peru, such as trade financing or remittances, according to ratings report from Fitch, which assign an A mark. Credit Suisse is managing the sale. DPR transactions – favored by Latin banks during times when dollar funding is challenging – have slowed in the last 6-9 months as the bond markets have reopened up. The last deal in the region was a $100m 5-year and 10-year from Santander Brazil in August 2009, according to Dealogic.
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Monsanto Plants Brazil ABS
Agricultural company Monsanto has raised BRL180m through a structured finance transaction using Brazil’s FIDC structure. The US-based global producer’s 10-year deal pays DI plus 2%. It is backed by trade receivables originated by the Monsanto do Brasil unit through the sale of seeds and chemicals to Brazilian agribusiness clients. Santander managed the sale, rated AAA on a national scale.