Project finance closings fall, but pipeline builds

Project finance deals fell by more than 50% year on year in the first half of 2015, according to data from Dealogic

The drop in deal flow could be caused by delays in infrastructure programs and fiscal adjustments in the region, as well as effects from the drop in oil prices, and economic slowdown in Brazil, market sources told LatinFinance. A recovery is expected for the second half, sources said, with Andean countries offering tenders for new infrastructure projects.

Already a number of transactions are in the pipeline. A large financing for a gas pipeline in Peru, Gasoducto Sur Peruano, is expected to close in the next two months. Meanwhile in Central America, the governments of El Salvador, Guatemala and Honduras are increasingly keen to attract private infrastructure investment.

In the lead

Despite the shake-up in deal flow, Banco Santander remained at the top of Dealogic’s Latin America project finance league table for the first half of 2015. Santander lent $1.39bn to 30 closed deals, or 19.5% of the total. It lent $2.67bn in a similar period last year.

Santander has increased activity in Colombia, Panama and Peru, where it took up relevant roles in transactions such as Metro de Lima, and worked on the Los Ramones Norte transaction in Mexico.

Runner-up Bradesco accounted for 13.3% market share in the first half of this year.

Meanwhile, Natixis and SMBC have made changes to their project finance teams in recent weeks. Both institutions have appointed new heads for LatAm project finance. Sam Sherman is set to take a senior advisor role at SMBC, while Natixis’ Pascal Soldaini will return to Paris to run project finance in the Middle East, Turkey, Africa and the CIS. LF