Latin America’s loan market is shaping up for a quieter year than 2014. Dealogic figures indicate 81 deals amounting to close to $34 billion were signed up to August 28, compared to 171 deals worth more than $54 billion over the same period last year.
Sources put the waning supply down to the high uncertainty over a US Federal Reserve rate hike, record-low commodity prices, weak national currencies and volatility in China.
Nonetheless, large, investment-grade coporates are accessing funding at favorable prices. Brazilian builders Votorantim Cimentos and Votorantim Industrial each completed five-year revolving credit facilities in July, for $700 million and $500 million, respectively. Bookrunners BNP Paribas, Natixis, Scotiabank and Sumitomo Mitsui Banking Corporation set the price at 85 basis points over Libor, tied to a ratings grid, for both of the facilities, and drew in a further 10 banks for syndication.
In late August, Mexican energy company IENova wrapped-up a five-year, $400 million club loan at 90 basis points over Libor with four lenders.
Also in Mexico, real estate vehicle Fibra Uno closed a dual-currency revolving credit facility, with a five-year tenor. The transaction comprised $360 million and 7 billion peso ($430 million) tranches, adding an accordion feature which allows for an up to 50% increase in the borrowing. Bank of America-Merrill Lynch, BBVA, Credit Suisse, Goldman Sachs, HSBC, Itaú and Santander were lenders.
Cemex and Grupo Cementos de Chihuahua (GCC) completed refinancings. Cemex agreed to a $1.94 billion loan with 17 banks, pushing out the average life of the debt to four years. GCC’s five-year syndicated credit facility for $194 million was led by bookrunners BBVA, Citi and Scotiabank, who brought in a further seven lenders.
Eyes are now on the Brazilian lender Banco Safra, which is in the market for a three-year, $200 million syndicated term loan. Bank of America-Merrill Lynch, Commerzbank and Mizuho have the mandate for the deal. Given the complicated situation in Brazil including a recent sovereign downgrade, financiers are carefully following the evolution of this transaction.
Project finance rolls on
In the infrastructure space, Gasoducto Sur Peruano remains the largest deal moving through the market. The consortium formed by
Odebrecht Latinvest and Enagás is negotiating a $4.125 billion seven-year syndicated non-recourse loan with 14 bookrunners and mandated lead arrangers, plus up to 10 second-tier participants (see page 30 for more on this transaction).
In Mexico, a Carso Energy-led consortium developing two natural gas pipelines between Texas and Mexico has mandated BBVA, Mizuho, MUFG and SMBC to lead a $1.2 billion financing. Mexico’s Comisión Federal de Electricidad awarded the Waha-Presidio pipeline and the Waha-San Elizario pipeline to the consortium in January. Also in Mexico, Fermaca signed a 3.5-year, mini-perm loan for around $600 million with a club of six banks to finance a 262-mile natural gas pipeline.
In Chile, Pattern Development closed a 16.5-year, $192.4 million financing for its Conejo Solar power plant. Crédit Agricole, Société Générale and SMBC were mandated lead arrangers and joint bookrunners, while Santander provided a VAT facility. LF