CNAA the startup has clinched a 15-year, $269m A loan from the IDB and a commitment to help it raise an additional $379m for three new ethanol plants in south-central Brazil. The A loan will carry a spread of between 300bp-350bp over Libor, says an IDB official, adding an extra 50bp of padding to the targeted 300bp area CNAA’s CFO Jair Steola told LatinFinance he was expecting earlier this year. The B loan will be syndicated by BNP Paribas, and should begin immediately, say bankers close to the process. The financing package for CNAA will also feature a novel sugar hedge that helps it raise lower-cost financing at longer tenors, says Steoloa. The instrument, to be put in place by Goldman Sachs and or BNP Paribas, is designed to reduce the borrower’s exposure to fluctuating sugar prices for up to 5 years, covering 70% of production. The three new plants are being built in the states of Minas Gerais and Goias and will produce up to 420m liters of ethanol for the domestic market each year, adds IDB.
Category: Structured Finance
Usiminas Fires up Ambitious Syndication
Brazilian steelmaker Usiminas is readying its third foray into the syndicated loan market in a year, this time with an aggressively priced $400m IDB A/B loan, say bankers familiar with the deal. Sumitomo has been tapped to lead the $350m syndication for the 8-year B loan, thanks to an aggressive pitch to underwrite the facility at a margin as low as 75bp over Libor, say bankers away from the deal. Executives involved in the process declined to confirm the figure, but conceded pricing was in the Libor plus 75bp-100bp range. In either case, the margin is tighter than what comparable borrowers have recently sought. For example, in June, Gerdau closed a 3-year $500m facility at Libor plus 125bp. Usiminas’ syndication strategy will involve showing the loan to Japanese banks, say officials on the deal, who point to its strong ties to the country. Nippon Steel is the company’s largest shareholder. Proceeds will help build a new thermoelectric power plant. In February, Usiminas raised $1.3bn in a two-part syndicated loan via HSBC, with 5 and 7 year tenors on a trade facility paying Libor plus 110bp and 135bp respectively, as well as a 2-year liquidity facility at Libor plus 75bp. In June 2007, Usiminas raised a $300m 5-year standby facility via Calyon and HSBC at 25bp over Libor out of the box. The company has also visited the debentures market, issued cross border bonds and tapped bilateral agency funds in the past year to help finance a $14bn expansion program.
Panama Joins CAF Shareholders
Panama has become a full member of CAF. The Central American country will pay $170m for an undisclosed number of shares in the Caracas-based multilateral to join the its16 other shareholder countries. Panama will also contribute $36m to CAF’s capital guarantee fund. The country has held a $25m stake in the multilateral since 1997, says
HiTo Prepares Second RMBS Issue
Mexican securitizer Hipotecaria Total is preparing to launch the next piece of a novel MXP200bn 3-year RMBS program. HiTo plans to begin in August the placement of up to MXP10bn in 9.5% 20-year bullet bonds, known as Bonhitos, in weekly auctions. The shop is the first to bring the Danish model of mortgage securitization to the western hemisphere, according to COO Gerardo Flores. He adds that the bonds can be issued as the mortgage credits are accumulated, rather than waiting to build a large pool. HiTo has placed MXP50bn in 8.5% bonds since opening the first Bonhitos program in December. Creating a new MXP10bn tranche allows the issuer to increase the rate to 9.5%, matching an increase in underlying levels. The issuer is in discussions with lenders including Scotia, HSBC, ING, SuCasita, Finacasa and Credito Imobilario to include their credits, says Flores. “The goal is to sign up nine originators in 2008 and originate MXP12bn by December, from 35,000 loans,” he adds. Intercam Casa de Bolsa is managing the placement.
CAF Approves Venezuela Hydro Resources Loan
CAF has approved a $75m loan to state owned Venezuelan hydrological company Sistema Hidraulico Yacambu-Quibor, the Venezuelan state owned news agency ABI says. The funds will be used to improve the distribution of water from the Yacambu River for agricultural and human consumption in the state of Lara in Western Venezuela, the agency adds.
Costa Rica’s ICE Clinches A/B Funds
The Instituto Costarricense de Electricidad (ICE) has raised $391m through an IDB A/B facility, say bankers on the deal. The multilateral lent the utility $181m in a 15-year credit at an undisclosed rate, marking a new benchmark for the country’s loan market, says a participant on the deal. A $210m 10-year B loan, led by Citi, offers Libor plus 300bp. The funds constitute an unsecured corporate loan, though ICE is owned by the Costa Rican government, which is rated BB+ by S&P. MLAs in the deal include Banco General, BNP Paribas, KFW Idex and Sumitomo Mitsui. The loan was heard oversubscribed.
CAF Approves $1bn in Loans for LatAm Countries
CAF has approved a total of $1bn in loans to Brazil, Bolivia, Ecuador and Uruguay. The Caracas-based multilateral approved a $400m credit line for the Uruguayan ministry of finance to support its public debt management strategy. Ecuador received a $310m loan for relief efforts for natural disasters and to finance the Quito road network, says CAF. For Bolivia, the multilateral approved $250m for an economic infrastructure program in marginalized areas administered by the country’s ministry of planning and development. And for Brazil, CAF approved $100m for a road pavement program aimed at improving road connectivity lead by the road infrastructure department of the state of Paraiba, notes the multilateral.
Bladex Hires Merrill’s Vera
Panama-based development bank Bladex asset management unit has hired Tulio Vera, Merrill Lynch’s former head of EM research who left the firm earlier this year, apparently on his own accord. Vera will be chief strategist and head of client relations for the development bank’s asset management business, it said Thursday. The executive will be based in New York and be responsible for identifying investment opportunities and expanding Bladex’s reach to third-party investors. He will report to Manuel Mejia, head of Bladex Asset management. Vera, a native of Chile and a heavyweight in EM research, is heard to have sought new opportunities within Merrill before leaving the firm. His departure coincided with the rise of Felipe Illanes and Pablo Goldberg to new roles within EM research and strategy.
Peru Banks Plot Sub Debt Issuances
Two large Peruvian banks are heard preparing of subordinated debt offerings to be priced in the coming month. The two deals, each estimated in the $150m-$200m range, are meant to fortify Tier 1 and Tier 2 capital requirements, say bankers familiar with the process. The transactions could take one of two forms: a 15 NC5 bond for Tier 2 capital requirements, which is the more likely scenario, or a 30-year NC10 for Tier 1 capital requirements. For Tier I, a 60-year maturity is also a possibility, say bankers familiar with this type of transaction. Likely issuers include Scotiabank, Interbank, BBVA Continental and BCP. Among the likely houses underwriting the deals, which are placed with international investors in the 144A market, are Citi, Merrill Lynch, Credit Suisse and Deutsche Bank, says one executive close to a Peruvian bank. The hybrid deals would follow in the footsteps of a dramatically reduced offering by Banco Industrial of $30m in 60-year NC10 securities that carry a 9% handle in the first 10 years. Credit Suisse led that offering, originally launched at $100m. Separately, BCP and BBVA are set to bring MT100 future flow securitizations as early as this month via Wachovia and Standard Chartered for the former and Sumitomo for the latter.
CAF Issues Swiss Bonds
CAF has tapped the Swiss franc market, raising CHF200m ($194m) in 2013 bonds at 100.065 with a 5.00% coupon to yield 4.985%. The offer was upsized from CHF100m on demand of just over CHF200m, say executives on the deal. More than 20 institutional and private investors participated, they add. “It’s a high-quality market that we’ve been looking at for a while,” Gabriel Felpeto, CAF’s international director, tells LatinFinance. He explains CAF’s most recent presentations in Switzerland were important in getting the deal done during a rough week for LatAm bonds. The A+ transaction makes CAF the first LatAm issuer in Switzerland in three years and the second in ten, says Felpeto. He says this issue is part of the $500m equivalent it plans to complete in different markets and currencies by the end of the year. Credit Suisse managed the sale.