Price Anxiety for Angamos Remains

AES’s Chilean power project Angamos succeeded in closing a $989m loan with a group of commercial and multilateral banks last week, but it should not rest easy yet, as pricing may still be adjusted upwards. The deal has not yet funded and should not do so for at least 2-4 weeks, say people close to the process. If 33% of the syndicate says at the time of funding that Libor does not reflect cost of funds, a mechanism for recalculating the pricing basis could be put into action, say people close to the process. In other words Angamos may still see a substantial hike for all in pricing by the time of closing. In a recent deal for Braskem, pricing was increased by 100bp in the first semester to reflect higher funding costs. In the case of Arcos Dorados, the borrower was stuck with a 150bp flex for the life of the 5-year deal. Angamos is a 17.5-year project deal with 3 tranches: A $675m KEIC tranche, a $233.5m commercial tranche and an $80m LC tranche. Pricing on the deal is 205bp over Libor for the 2.5-year construction period, and step-ups from 230bp-250bp in the 15-year post-construction period. The deal is led by BNP and ABN AMRO, each of which took $104m tickets. Calyon, SMBC, Deka, DZ, HSBC and Fortis each took $100m MLA pieces, while Dexia, KfW got $70m and $60m respectively. Helaba and ING came in with $30m and $20m tickets each.