NIB Mulls Local Currency

The Nordic Investment Bank (NIB) is thinking about issuing bonds in EM currencies to support its corporate lending program. “We would like to test it in Brazil or India,” Tarja Kylanpaa, NIB’s head of Asia, LatAm, Africa and Middle East tells LatinFinance. Kylanpaa says that duration in BRL would depend on market conditions. “Beyond 5 years, we don’t know. It depends on the swap curve,” she adds. NIB says is has a strong relationship with Itau and BNDES. The IFI focuses on companies and countries where its Nordic and Baltic owners have existing business. Typically NIB lends $30m-$70m at a time, at tenors of 5-15 years. In March it signed a $200m A/B loan for Brazilian telecom Embratel, along with a club that includes BBVA, Calyon, Societe Generale, Santander, Nordea and Natixis. NIB extended a $50m 5-year piece, while the club provided $150m, also in 5-year money. The all in rate for the loan is Libor plus 280bp, low versus the few LatAm comps available. The transaction was an important step for Embratel, whose regional corporate counterparts are struggling to secure cash with tenors longer than a year. Embratel established a relationship with the Nordic lender via a plan to build out its Brazil network using Nokia Siemens technology. The region looks set to continue benefiting from NIB’s involvement. Relative to other regions that she covers, Kylanpaa notes that LatAm is less impacted by the crisis.