Voto Preps Close of $2.65bn Loan

Brazil conglomerate Votorantim’s Participacoes was poised to close its multi-tranche $2.65bn loan Wednesday with some 20 banks heard either signing or about to sign up for the transaction. The deal marked the latest in a series of LatAm loans that have locked in what were considered ultra-tight spreads after Brazilian mining giant Vale and Mexican telecom America Movil set new lows earlier this year. Yet some bankers think that tights may have reached a trough and could be heading higher as banks push back amid an increasingly uncertain global backdrop and as funding costs climb for European institutions. It may be too soon to tell exactly which way spreads are moving, but the number of banks participating on a blue-chip loan like Votorantim’s is telling, says one banker. While the deal was heard to be oversubscribed with a healthy $3.7bn plus in demand, it couldn’t for instance boast the longer list of banks that participated at lower levels on the Vale trade. With Vale, apart from the 5 leads, 17 banks joined at the MLA level and another 6 joined with smaller tickets to push demand to $6bn. On Votorantim, HSBC and Societe General were selected as joint lead arrangers and bookrunners on both the $1.5bn 5-year senior revolving credit facility and the $1.15bn 7 and 8-year export-prepayment facilities. Bank of Tokyo Mitsubishi, BNP Paribas, JPMorgan and Santander were also selected earlier this year for the same positions on the revolver, while BAML, BBVA, Credit Agricole and Sumitomo were mandated as lead arrangers and bookrunners for the export prepayment facilities. Beyond that, just 4 institutions were thought to have come in at lower levels on the revolver and another 6 for the pre-export portions. Brazilian banks were also heard declining to participate after shunning what they considered tight pricing.. “If you look at where Brazilian banks are funding themselves, they would have had a mismatch, and they decided not to [participate],” says a banker with knowled