Enap Wades Into Crowded Loan Pool

Chile’s Enap is heard to be close to issuing an RFP for a new loan, say syndications officials. The quasi-sovereign oil producer is understood to be seeking up to $500m to address short-term maturities. The maximum tenor for Chilean borrowers today is 3 years, say bankers. The liquidity premium rises significantly for longer tenors, they note, and Chilean borrowers are unlikely to accept market rates for such funds. Chilean state run miner Codelco is also in talks with bankers to raise up to $400m at 3 years. Enap was downgraded in December to A3 after a poor year, and will thus face a higher margin than Codelco, rated A1. Banker estimates for Codelco’s spread range from 250bp-400bp over Libor. Timing on both deals is unclear, but bankers say funds are limited and 2 similarly rated Chilean quasi-sovereigns would likely compete if launched at the same time. Enap posted a $958m loss in 2008, mainly due to the fact oil prices hit an all time high in July and then plummeted dramatically through the rest of the year. This resulted in expensive raw material purchases in the first half and low-yielding sales in the second, says the company. Also, in Chile, AES Campiche is heard close to wrapping up a project loan after downsizing to $220m from $445m, and reducing the tenor to 7 years from 10 years. Pricing starts at 350bp over Libor, stepping up to 400bp.