Peru’s Scotiabank is heard preparing to issue a new set of bonds backed by remittances and other financial receivables, apparently its first such deal. DPR deals in Peru and Brazil have tended to carry 5-year tenors and be sized in the $100m-$150m range. Credit Suisse is heard leading the deal. The last DPR to be issued in LatAm came from Interbank, also in Peru. The bank sold a 7-year final 5-year average life bond worth $121.2m, at Libor plus 425bp. Deutsche Bank led. And in late March, Bradesco placed a $100m DPR via WestLB. Pricing came in the mid to low 200bp area over Libor, say people familiar with the terms. Other Peruvian banks including BBVA and BCP are also looking at doing DPR issues, say bankers close to those institutions.
Category: Structured Finance
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CAF to Approve Loans to Ecuador
The CAF says it plans to approve $900m in loans and make disbursements worth $500m this year to Ecuador. The plans were announced during a recent visit CAF executive director Enrique Garcia made to Ecuador. The aid would go to financing public and private sector projects.
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Paraguay Gets IDB Roads Funds
Paraguay has inked a $66m long term loan with the IDB in a second 5-year phase of the country’s national rural roads program, which will upgrade a substantial part of the priority rural roads network. The IDB says that 80% of funds for the loan will come from the IDB’s ordinary capital, with a 30-year term, 5.5-years grace, and an interest rate based on Libor. The remainder comes from the bank’s fund for special operations and has a 40-year maturity, a 40-year grace period and pays 0.25%. The total cost of the project is $170m. Local counterpart funds total $25.4m, along with $79.0m in cofinancing, says the IDB. The resources will support improvements and maintenance activities on local roads along 6,000km in rural zones in the eastern part of the country, used mainly to transport agricultural products. Other components include engineering and supervision, institutional strengthening and program management, and monitoring and baseline work. The program will be carried out by Paraguay’s ministry of public works and communications.
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Davivienda Lines Up Local RMBS
Colombia’s Banco Davivienda is preparing to sell up to COP450bn in RMBS Thursday, its second deal from a COP1trn program. Terms remain to be set but the mortgage lender can go with up to 5 different fixed and floating-rate tranches with maturities ranging from 1.5-10.0 years, a bank official says. Proceeds from the AAA sale will go to working capital and other general purposes. Davivalores, the bank’s own brokerage unit, is managing the sale. In January, Davivienda placed COP550bn across 6 tranches ranging from 1-10 years.
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Davivienda Prepares Local RMBS
Colombia’s Banco Davivienda is preparing to sell up to COP450bn in RMBS as soon as July 15, the second deal from a COP1trn program. Terms remain to be set but the mortgage lender can go with up to 5 different fixed and floating-rate tranches with maturities ranging from 1.5-10.0 years, a bank official says. Proceeds from the AAA sale will go to working capital and other general purposes. Davivalores, the bank’s own brokerage unit, is managing the sale. In January, Davivienda placed COP550bn across 6 tranches ranging from 1-10 years.
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Peru Agro Gets IDB Backing
The IDB has approved a $20m loan for Peru to help it improve the competitiveness of its agricultural sector. The loan is for 20 years, has a grace period of 5 years and pays an interest rate over Libor, says the bank. The program is the first of three loans to support Peru in implementing a new agricultural policy framework introduced in June 2008.
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CAF Extends Highway Cash to Argentina, Ecuador
The CAF has signed a $100m loan for Argentina to help finance the country’s railroad development program that aims to improve 29 km of railroads that connect the country with neighboring Paraguay. CAF says the total cost of the program is $166m and that the local government will chip in with the remainder of the funds needed. It is also disbursing $110m to Ecuador to help that country finance the construction of the Gualo-Puembo highway in Quito. The Andean bank says the highway will connect the capital city to a new airport that is being developed. The total cost of building the 13.5 km highway is $127.4m. The city will provide $17.4m to cover the total cost. Terms for the loans were not disclosed.
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IDB Boosts Lending by $6bn
The IDB says it will make an extra $6bn available to borrowers, amid progress with technical studies for a capital increase. Canada has agreed to temporarily increase its share of the callable capital of the bank by $4bn for a period of 5-8 years. This comes on top of $2bn in additional resources made available by June changes to rules limiting the IDB’s lending capacity. The IDB eliminated its policy-based lending authority, a rule that limits total loan outstanding and guarantee exposure to the callable capital of non-borrowing members plus the paid-in capital and general reserves of the bank. “The decision to end the policy-based rule will bring the IDB, the biggest source of long-term lending for Latin America and the Caribbean, in line with other multilateral institutions, whose lending is limited by their net borrowings and the lending limits set in their charters,” says the IDB. Meanwhile, the bank says it has set a deadline of December to finish technical discussions on a capital increase, its first since 1994. The board of governors, made up of top financial officials from the IDB’s 48 member states, will meet again in Madrid October 8 to continue work on the issue. “The IDB will have to scale back operations in the future, unless more capital is made available. The IDB’s backlog of projects in the pipeline has held steady at $25bn, despite record levels of approvals and disbursements in recent years,” says the bank. Between 1994 and 2008 the IDB provided about $109bn of loans to the region.
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Infonavit Sells MXP2.59bn RMBS
Mexican lender Infonavit has sold MXP2.59bn in 2031 RMBS, in only Mexico’s third such transaction of the year. The lender priced the single-tranche issue denominated in UDIs at a fixed-rate of 5.70%, or UDIbonos plus 230bp. The book reached MXP4.2bn, says a banker managing the sale. The issue has an expected maturity of 9.8 years and average life of 5.3 years. As with the two previous deals – a MXP2bn issue from Infonavit in May and a MXP3.5bn June issue from Fovissste – the issuer used a single tranche structure that is more straightforward than pre-crisis RMBS, in order to appease timid investors, who thus far are only keen on government-backed lenders. Banamex and Deutsche Bank managed the sale, rated AAA on a national scale, with HSBC as co-manager.
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Colombia Sees IDB Boost
The IDB has approved a $250m loan for Colombia to help boost the country’s water and sanitation services. The loan is for a 20 year term with a 5-year grace period, and priced over Libor. The improvement of the water and sanitation systems is expected to bring an increase in urban water coverage in 2011 to 97.8% from 94.5%, and sanitation coverage to 93.2% from 90.1%, says the IDB.