Category: Structured Finance

The IDB’s private sector arm, headed by Hans Schulz, is looking to build up a domestic presence in Latin America, and hopes to have a third of its staff based locally by the end of next year, Schulz tells LatinFinance. “We want to be present in 10 countries in the region,” says Schulz. He adds that he would like to see up to 25 of his staff present in the region at any given time. Working with corporate borrowers, a new mandate for the IDB, will demand a larger presence in the region, says Schulz.

CAF has signed up Argentina as a member with a $643m participation. It is first Latin, non-Andean nation to join the multilateral, following a recent change in the rules that allows such members. At the signing, CAF also agreed a $300m loan to partially fund the Interconexión Eléctrica Rincón Santa María-Rodríguez project. The deal is the seventh CAF has signed in the country. Full membership is expected to boost CAF financing to Argentina.

Warren Weissman, head of LatAm loan syndications at Banc of America Securities, is moving to the IDB to head the Corporate Finance division in the multilateral’s reformed private sector group, headed by Hans Schulz. As division head, Weissman will be responsible for a team of up to nine executives, a number that may grow with local additions in the coming months. He will focus on lending to corporates in the region. The idea is not to compete with commercial banks, but to participate jointly and complement their business in LatAm, Weissman tells LatinFinance. The IDB, currently undergoing a personnel overhaul, is looking to hone in on the private sector and shift away from its historical emphasis on large infrastructure and sovereign deals. Weissman is expected to start the Washington appointment in September.

Telefónica’s Colombian unit is preparing to launch a $600m A/B loan. The IDB will fund $125m in a 7-year A-loan and the remaining $475m will be syndicated out as a 5-year B loan, with ABN AMRO, Santander, Citi and BNP leading. Proceeds are for general capex and working capital, according to people close to the deal. Launch is expected in October.

Argentina’s plan to borrow $10bn from the IDB and World Bank in the coming months for 2008-2011 is being viewed as a positive move by Wall Street analysts, who believe the country would be subjected to a more disciplined approach to the markets and its debt management policy. “Argentina appears to be taking stock of the change in global conditions and financing risks; and the country is looking for new sources of funding that would require maintaining a more conservative policy framework,” says Merrill Lynch. Citi notes total amortizations with the IFIs are expected to be $6.4bn in that period, which permits the institutions to become net suppliers of funds to Argentina if they are needed. The move marks a significant change of tune by the Kirchner administration vis-à-vis multilaterals. Last year, Argentina paid down its IMF loans in a dismissive tone, saying the institution’s opinions were no longer welcome or relevant. The new funds would be used for investments in public works, social programs, health, science and technology.

Banco Latinoamericano de Exportaciones (Bladex) has signed an MOU with FIMBank in Malta to establish a joint-venture company to offer full factoring services to companies, banks and other financial institutions in Latin America. “The factoring business offers an attractive growth opportunity for Bladex and FIMBank in Latin America as companies seek to translate discounted receivables into improved cash flow,” says Bladex. The bank’s CEO, Jaime Rivera, says the deal will allow Bladex to offer a greater range of trade finance-related products and further diversify its revenue streams. “Factoring is the fastest growing trade finance product, outperforming all other instruments in international as well as domestic trade, especially with regards to small and medium-sized enterprises (SME’s),” says Margrith Lutschg-Emmenegger, president of FIMBank.