Usiminas Lands Cheap Yen Loan

After more than 8 months of discussions and meetings, Usiminas has clinched an IDB A/B loan to help finance a new thermoelectric power plant in the state of Minas. The facility is denominated wholly in JPY and will likely be swapped back into BRL. The IDB is providing a JPY2.1bn ($21.5m) 8.5-year A loan at an undisclosed rate over Yen Libor, while SMBC led a club that involves 3 other undisclosed Japanese banks for JPY17.5bn ($179m) at Yen Libor plus 150bp. Though the deal was originally expected at twice the size and half the rate over Libor, securing funds at Yen Libor plus 150bp in the case of the B loan and slightly higher in the case of the A loan is, by any measure, a coup for Usiminas given today’s market conditions. Other similar deals could follow if borrowers can etch out an angle to get Japanese lenders involved, says a banker on the deal. The transaction marks the first time the IDB has scored a JPY denominated B loan, claims an official at the multilateral.